AstraZeneca, the struggling drug maker which is without a permanent boss after its chief executive quit under shareholder pressure, yesterday had another ailment to deal with as second-quarter sales fell by a fifth.
Sales tumbled 21 per cent to $6.6bn (£4.2bn) in the three months to June, hit by generic competition to Astra's best-selling antipsychotic medicine, Seroquel, as well as European governments' squeeze on health spending.
Revenues in Western Europe fell 20 per cent, following in the footsteps of Astra's bigger British rival GlaxoSmithKline, which yesterday admitted it will see only flat revenues this year.
But Astra has other difficulties: the FTSE 100 drugs giant's ex-chief executive David Brennan shocked the City when he quit in April in an apparent boardroom coup just hours before its shareholder meeting. Investors were angry about Astra's plunging revenues as key drugs faced generic competition, as well as its weak pipeline of newproducts, and today threw up fresh evidence of just how bad its predicament is. About half of Astra's $33bn annual revenues are set to fall away over the next four years, including the ulcer treatment Nexium and the cholesterol-buster Crestor, which is worth $6.6bn a year.
In the second quarter, a generic version of Seroquel hit the pharmacy shelves, accounting for 80 per cent of Astra's fall in US revenues, which were down 29 per cent in the three months to $2.3bn.
Simon Lowth, Astra's finance director who was promoted to interim chief executive, said: "The loss of exclusivity on some key brands and tough market conditions have resulted in a decline in revenue and earnings in the second quarter. Despite these challenges, we are on track to achieve our financial targets for the full year."
The drug maker's pre-tax profit was 36 per cent lower at $3.8bn in the first half of 2012.
"The second-quarter result reflected the challenging environment that AstraZeneca faces with generics impacting sales of Seroquel IR and a portfolio dominated by mature products," said Brian White, pharma analyst at Shore Capital.
AstraZeneca develops and manufactures medicines for illnesses, including cancer and neuroscience, and employs 57,200 people worldwide.