LONDON: Pharmaceutical giant AstraZeneca PLC said it would have to cut about 3,000 jobs in order to achieve cost savings over the next three years. It warned of growing competition in the generics market which could slow sales growth this year.
The company also announced a 17 percent growth in fourth quarter earnings as more doctors prescribed AstraZeneca products. It made a net profit of $1.4 billion for the quarter ending December 31. Revenue for the same period rose 14 percent at $7.2 billion.
Full year sales for 2006 were 11 percent up year-over-year to $26.48 billion while FY pre-tax profit surged 28 percent to come in at $8.54 billion. Though the FY results were in line with analysts' forecasts, the company warned of a slowdown in sales growth in 2007.
The growth was largely led by its top five products: cholesterol-lowering drug Crestor, asthama medicine Symbicort, heartburn drug Nexium, breast cancer treatment Arimidex and schizophrenia treatment Seroquel. The combined sales of these formulations came in at $13.3 billion reflecting a 26 percent increase Y-O-Y.
The pipeline of future drugs remained weak despite consistent effort but “more remains to be done" chief executive David Brennan said. The company is currently facing some patent problems and a series of late-stage pipeline failures. Barring these few issues, the immediate to mid-term outlook is fairly bullish among investors. The announcement of a job cut was welcomed by the stock market which saw share price rise 2 percent to 2,903p.
Astra Zeneca, is one of the world's largest pharmaceutical companies and a result of a merger between British Zeneca Group and Sweden's Astra B. The pharma giant now plans to buy antiviral specialist Arrow Therapeutics in a $150m cash bid.
Products in the pipeline include a heart drug now labeled AGI-1067; its clinical trial results are expected next month. This drug helps reduce plaque inside the arteries, but it is at an experimental stage in its development and its risks and rewards are still being assessed, the company clarified. The company is also looking to bring new formulations for respiratory diseases and obesity into the market as part of an expansion plan.
