Crestor Competition Overshadows AstraZeneca Results
AstraZeneca said on Thursday its blockbuster cholesterol medicine Crestor faced a generic challenge from Canada's Cobalt Pharmaceuticals, as third-quarter profits fell 14 percent.
Cobalt's application for U.S. regulatory approval to sell a copy of Crestor is a fresh blow to the Anglo-Swedish group, which is already fighting generic threats to its two biggest revenue generators, Nexium and Seroquel.
Industry analysts said Cobalt was trying to get in ahead of rival generic manufacturers and the company faced a long legal battle against the patents defending Crestor.
The news overshadowed third-quarter results from Britain's second-biggest drugmaker, which showed pre-tax profits of $1.89 billion on sales up 10 percent at $7.15 billion, equivalent to earnings per share of 91 cents -- better than some analysts had feared.
The stock fell 0.46 percent to 23.62 pounds.
The average industry analyst forecast for EPS had been 85.4 cents in a Reuters poll of 18 analysts, reflecting competition from cheap generics plus acquisition and restructuring charges.
The company said it was on track to achieve its full-year targets for underlying earnings per share in the range of $3.60 to $3.75, excluding restructuring costs and U.S. sales of heart drug Toprol XL.
Top-seller Nexium had a lacklustre quarter, reflecting pressure on the gastric acid treatment from generic omeprazole, an older medicine.
But demand was strong for schizophrenia drug Seroquel and asthma treatment Symbicort, which was launched mid-year in the United States.
Race to Challenge
AstraZeneca said it was evaluating Cobalt's allegations and had full confidence in its intellectual property. Crestor, which had sales of $691 million in the third quarter, is covered by three key patents valid until 2016, 2020 and 2021.
Mike Ward, an industry analyst at Nomura Code Securities, said the challenge did not mean sales of Crestor were in imminent danger.
Rather, it reflected the intense competition between generic drugmakers to file with the U.S. Food and Drug Administration ahead of rivals in order to gain temporary generic exclusivity.
"Across the industry, we are seeing earlier and earlier attempts to get abbreviated new drug applications into the FDA," he said.
AstraZeneca views Crestor as a key growth driver for the business in the years ahead and has been running a major clinical trials programme to try to prove its superiority to other similar statin drugs.
It originally licensed the drug from Japan's Shionogi & Co, which receives royalties on sales.
AstraZeneca stock has been under pressure year, reflecting concerns about its relatively thin pipeline of new drugs, patent threats and the poorly received deal to buy U.S. biotech firm MedImmune in April.
Many investors criticised the price tag of $15.6 billion as too high.
The shares currently trade at 12 times forecast 2008 earnings, a 15 percent discount to the European sector average.