AstraZeneca (AZN) leaned on cancer and diabetes drugs in the third-quarter, leading to double-digit sales growth, a strong earnings beat and a massive jump for AZN stock.
XLee Brown, global sector lead for health care at research firm Third Bridge, said the strong report "was driven by success across its franchises." The company's cancer drugs, Calquence and Imfinzi, put up strong performances, growing a respective 60% and 19% on a strict, as-reported basis. Meanwhile, sales of diabetes treatment Farxiga rocketed 38%.
Farxiga "continues to enjoy volume growing faster than the overall (drug class) market, as well as benefitting from uptake for the treatment of heart failure and chronic kidney disease," he said in a report to clients.
In morning trading on the stock market today, AZN stock surged 7.2% near 65.50. Shares gapped to a nearly three-month high.
AZN Stock: Core Earnings Skyrocket
Overall, core AstraZeneca earnings grew 55% year over year to $1.67 per share. Total revenue rose 11% to $10.98 billion. In constant currency, earnings advanced 70% and sales jumped 19%.
Part of the strong growth stems from the acquisition of Alexion Pharmaceuticals, maker of rare-disease drug Soliris. Though Soliris sales fell 13% during the quarter, they still added $901 million to the company's top line.
Cancer drug Calquence brought in $566 million in sales. Sales of the company's biggest moneymaker, a cancer drug called Tagrisso, grew 12% to nearly $3.8 billion.
Outside of cancer, Farxiga brought in $1.1 billion.
Shares Eye A Buy Point
On a bearish note for AZN stock, revenue from the vaccines and infectious diseases segment fell 27% year over year as demand for Covid vaccines declined. The AstraZeneca-Oxford partnered Covid shot generated just $173 million. Sales plummeted 83%. AstraZeneca also reported declines for its respiratory syncytial virus prevention drug Synagis and its nasal flu vaccine, FluMist.
AstraZeneca raised its earnings guidance for the year. It now expects core earnings to grow by a high-20% to low-30% range vs. the previous outlook for a mid-to-high 20% increase. The firm kept its outlook for revenue to increase by a low-20% range.
AZN stock is now consolidating with a buy point at 68.49, according to MarketSmith.com. The move Thursday put shares closer to an entry.
Shares also have a high Composite Rating of 91. This puts AZN stock in the top 9% of all stocks in terms of fundamental and technical measures, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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