AstraZeneca warns on profits in 2016 as Crestor patent loss weighs
By Ben Hirschler
LONDON (Reuters) - AstraZeneca (AZN.L: Quote) warned on Thursday that revenue and earnings would drop this year due to the arrival of cheap generic rivals to Crestor, its top-selling cholesterol drug, which will offset growth in sales of newer medicines.
The drugmaker, which saw off a takeover attempt by Pfizer (PFE.N: Quote) in 2014, is expected to see a trough in profits this year and next before a hoped-for resurgence on the back of a promising pipeline of experimental drugs.
For 2016 AstraZeneca said that would mean a low to mid single-digit percentage decline in both revenue and core earnings per share, which exclude certain items, at constant exchange rates.
With currencies expected to have a further adverse impact of around 3 percent, the downbeat outlook had dragged the shares down 4.2 percent to 4,227 pence by 4.58 a.m. ET.
Many investors had expected AstraZeneca to predict broadly flat earnings in 2016, in part because long-term management incentives are tied to keeping earnings at or above $4.20 a share. The new guidance implies a figure of about $4.00.
However, a company spokeswoman said the remuneration committee would take the dilutive impact of recent acquisitions into account when assessing performance, which Jefferies analysts said gave executives increased leeway to invest in research and development (R&D).