AstraZeneca blames customer cut backs for disappointing results

The Anglo-Swedish pharmaceutical group AstraZeneca posted what analysts considered to be disappointing first-quarter sales figures yesterday, but said that its full-year earnings growth was on track to meet expectations.

The company blamed customers cutting back on stocks of drugs in the first quarter as the main reason for the numbers, which showed 10 per cent sales growth, below forecasts. The group manufacturers Nexium, the blockbuster ulcer treatment, which had faced a patent challenge from the Indian generics company Ranbaxy that was resolved in AstraZeneca's favour last week.

Analysts expected that Nexium sales growth would be slower, but were mystified why other drugs had also been de-stocked. Simon Louth, AstraZeneca's chief financial officer, said there was "no particular reason".

First-quarter, pre-tax profits were up 12 per cent to $2.65bn (£1.34bn), although this figure did not include restructuring costs associated with the buyout of the biotechnology group MedImmune. Shares in the company fell by 5 per cent on the announcement, with analysts blaming a misunderstanding of the figures. The group has said that due to beneficial movements in the dollar, earnings per share growth had increased by 5 cents.

Peter Cartwright, an analyst at Evolution, said that most investors had assumed that the growth increase had been worked out by taking a set dollar price for the whole year, when in fact it is worked out by the company on a quarterly basis. Shares had recovered to 2,120p by the close of trading, down 0.6 per cent, with investors assuming that the 5 cent figure will improve during the year.

Despite the group maintaining that it will hit annual sales targets, Simon Mather, a pharmaceutical industry watcher at WestLB, said the company would come under pressure in the next year, particularly from generics groups.

The patents of Seroquel, the company's psychiatric treatment, and Crestor, an anti-cholesterol drug, face challenges in the next 18 months. Mr Louth said he would vigorously defend its intellectual property rights.

Seroquel recorded sales of $1.05bn in the first quarter, up from $923m last year, while Crestor made $772m against $628m in 2006.

Mr Louth also refused to rule out a move away from the UK. Last week, one of AstraZeneca's rivals, Shire, said it was to re-domicile in the Republic of Ireland to take advantage of the country's 12.5 per cent corporate tax rate. UK corporate tax is charged at 28 per cent.

Start your day with The Independent, sign up for daily news emails
house + home
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Life and Style
Bats detect and react to wind speed and direction through sensors on their wings
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Ed Miliband, Nick Clegg and David Cameron appeal to the audience during the Question Time special
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living