AstraZeneca lifts 2005 hopes after in-line 2004

AstraZeneca Plc said on Thursday strong demand for established medicines and cost cuts would help it overcome recent setbacks to newer drugs, boosting its shares as it reported an expected rise in 2004 earnings. Europe's third-biggest drugmaker, whose shares have fallen 30 percent since September on blows to its three biggest new drug hopes, said earnings per share would rise to $2.40-$2.55 in 2005, above analysts' current consensus forecast of $2.38.
"Their guidance is quite positive for the year going forward," said Michael Gifford, a fund manager at F&C who bought AstraZeneca shares before the results statement and planned to hold on to them. "It answers a lot of the bears who have got short positions on this stock," he said.
At 1250 GMT, AstraZeneca shares were up 3.8 percent at 19.73 pounds, the biggest rise on the FTSE-100 index of blue chip UK companies.
The Anglo-Swedish firm said 2004 earnings per share before exceptional items (EPS) rose 19 percent to $2.11, including a fourth-quarter contribution of 59 cents.
That was despite fourth-quarter charges of $85 million for writing down stocks of cancer drug Iressa, which flopped in a clinical trial in December, and $71 million for anti-clot pill Exanta, which was rejected by US regulators in September.
The average forecasts of analysts surveyed by Reuters was for 2004 EPS of $2.10 and a fourth-quarter figure of 58 cents.
"They've absorbed costs. So the underlying figures are a touch better," said Peter Cartwright, an industry analyst at Williams de Broe.
AstraZeneca said 2005 earnings would be driven by strong demand for established medicines such as Nexium for stomach ulcers and Seroquel for schizophrenia, as well as tight cost control and productivity improvements.
Chief Executive Tom McKillop was also confident about the prospects for anti-cholesterol drug Crestor, despite recent safety concerns over the drug holding back sales. "It will certainly take longer, but nothing has changed in the profile (of Crestor) to say that we shouldn't get a very substantial share of the market," he told.