AstraZeneca profits climb despite $80m hit after US rejects Exanta

AstraZeneca has written off an $80m (£45m) stockpile of Exanta, the blood-thinning drug that looked like it would be the company's biggest new drug before it was blocked by a US regulatory panel.

AstraZeneca has written off an $80m (£45m) stockpile of Exanta, the blood-thinning drug that looked like it would be the company's biggest new drug before it was blocked by a US regulatory panel.

Shares in Europe's No 3 drug maker rebounded yesterday, however, after the company said profits would still be better than hoped this year and thereafter, in part because it no longer has to shoulder the costs of launching Exanta in the US.

A panel of doctors decided that Exanta was probably not effective enough, and was too dangerous, to be allowed on the market. The Food & Drug Administration, the regulator, will decide, possibly by the end of this week, whether Exanta could one day be approved if more safety trials are conducted and if users can be properly monitored for signs of liver problems.

The financial pros and cons of the Exanta debacle - which has wiped 20 per cent from AstraZeneca's market value - were set out in the company's third-quarter results, which showed a profit of $1,274m, up 14 per cent thanks to the proceeds of the disposal of its crop seeds business. The company said that full-year earnings per share, before exceptional items, would be about $2.10, even after writing off the pre-launch Exanta inventories. Previously, the company was guiding investors to expect about $2.07.

The upgrade obscured lower-than-hoped sales, in particular of Nexium, the ulcer pill AstraZeneca developed to offset the loss of patent protection on an earlier ulcer treatment, Losec, where sales have collapsed. Nexium sales in the third quarter were $951m, down 6 per cent, which the company said was down to wholesaler buying anomalies. There were also disappointing sales across the group's portfolio of products in Europe, where prices are government controlled.

Group sales were $5,265m in the three months to 30 September, up 7 per cent if currency fluctuations are ignored.

The improved profitability is the first evidence of cost cuts, particularly in drug marketing and general administration. Sir Tom McKillop, the chief executive, said earlier this month that AstraZeneca had launched a root and branch review of its operations in an effort to save money.