AstraZeneca has sharpened its focus on cancer drugs with two new deals as it looks beyond a hit to sales and profits from the launch of cheap copies of its popular stomach acid pill Nexium in the vital U.S. market.
The drugmaker, which saw off a $118 billion bid by Pfizer last year, said on Friday its sales fell by a slightly less-than-expected 6 percent in the first quarter, hurt by Nexium generics and the strong dollar, its reporting currency.
Chief Executive Pascal Soriot said its new alliance with Celgene would maximize the potential of immune system-boosting drugs in blood cancers and a tie-up with Innate Pharma would further strengthen immuno-oncology.
AstraZeneca will get an upfront payment of $450 million from Celgene, while Innate will receive an initial $250 million from AstraZeneca.
Despite the loss of sales on profitable old drugs like Nexium and Crestor for cholesterol, which loses U.S. patent protection next year, AstraZeneca argues new cancer drugs can help lift sales to $45 billion in 2023 from 2014's $26 billion.
Analysts view the forecast as a stretch, although confidence is building in its immuno-oncology portfolio, with the next focus being clinical trial updates it will give at the May 29-June 2 American Society of Clinical Oncology meeting.
The group reiterated its forecast of a low single-digit percent increase in 2015 "core", or adjusted, earnings at constant exchange rates.
Quarterly sales were $6.06 billion, generating core earnings per share (EPS) that were down 7 percent at $1.08 cents. Quarterly Nexium revenues slumped 31 percent to $644 million.
Industry analysts had on average forecast group sales of $5.98 billion and earnings of $1.07 cents a share, according to Thomson Reuters.