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Astra warns on falling Covid treatment sales after record year

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AstraZeneca will sell its Covid vaccine at a profit this year./AFP
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Feb 11, 2022 - 02:58 AM

LONDON, UNITED KINGDOM — British Covid vaccine maker AstraZeneca on Thursday warned that coronavirus product sales and profit margins would drop this year as the pandemic recedes and after record-high group revenue in 2021.

AstraZeneca rapidly developed a successful Covid-19 jab during the pandemic that generated full-year sales of almost $4.0 billion (3.5 billion euros) last year, the company said in a results statement.

After initially offering the vaccine at cost, Astra decided in November to begin selling Vaxzevria — developed alongside University of Oxford — for profit.

Covid revenue decline 

Revenue from Covid-19 medicines is set to decline by up to a quarter, AstraZeneca said Thursday.

But total group revenues would increase this year by a “high-teens percentage” thanks in part to sales of antibody treatment Evusheld.

The drug is for high-risk people who show resistance to vaccines against coronavirus.

Astra on Thursday added that its net profit tumbled last year, hit by costs arising from the vast takeover of US biotech firm Alexion.

Profit after tax slumped to $112 million (98 million euros) from $3.2 billion in 2020.

Revenues soared 41 percent to $37.4 billion.

“2021 was an exceptional year for AstraZeneca in terms of revenue, which exceeded $37 billion and was the highest in the company’s history,” noted chief executive Pascal Soriot.

“This put us well on track to deliver our promise of annual revenue of $40 billion one year ahead of schedule.”

He added that AstraZeneca’s “rapidly improving financial position” had allowed it to raise its annual dividend payment the first time in a decade.

Soriot said the company last year delivered on its “promise of broad and equitable access” to its Covid-19 vaccine” with 2.5 billion doses released for supply around the world”.

At the same time, the group faced vast costs following its $39-billion takeover of Alexion, while large impairment and restructuring charges also weighed.

Astra swung into a pre-tax annual loss of $265 million, after a $3.9-billion profit last time around.

But its share price was up 2.1 percent in London trading Thursday.

“The Covid vaccine has raised Astra’s global profile significantly,” said Hargreaves Lansdown analyst Keith Bowman.

“For now, and with further innovation and new drug successes ongoing, analyst consensus opinion continues to point to a strong buy” of its shares.

Since taking the helm at AstraZeneca in 2012, Soriot has pushed the company into lucrative treatments such as cancer therapies, and the Alexion takeover gives it more heft in areas such as treating blood disorders.

As for its Covid vaccine, “time spent developing and distributing (the jab)… has been time away from its core business”, Bowman added.

“The purchase of Alexion at what is considered a full price is also yet to be fully justified.”

Astra’s EU’s Covid vaccination roll-out was extremely sluggish initially because of a big shortfall in the amount of doses the company had promised the bloc, sparking a row between the parties.

The European Union has since pivoted towards mRNA vaccines, particularly the one produced by US drugs giant Pfizer in partnership with German peer BioNTech, after rare blood-clot problems with AstraZeneca increased public hesitancy about taking it.

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