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AstraZeneca beats profit forecasts, external deals help

AstraZeneca revenue fell by a smaller-than-expected 7 percent in the second quarter, as income from spinning off assets offset generic competition to older medicines and a strong dollar.

The drugmaker increased its revenue forecast for the year and said it now expected a low single-digit percentage decline, against mid single-digit previously, while core earnings are still expected to increase at a low single-digit rate.

Viagra made by Pfizer and Nexium made by AstraZeneca.
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Viagra made by Pfizer and Nexium made by AstraZeneca.

The decision to hold the earnings outlook despite a better revenue picture reflects accelerated investment in research and development, the company said.

Chief Executive Pascal Soriot, who fended off a $118 billion takeover attempt by Pfizer last year, is banking on a promising pipeline of new drugs - particularly in cancer - to revive the company's sales from 2017.

Quarterly sales totalled $6.3 billion, held back by cheap copycat versions of heartburn pill Nexium, while core earnings per share, which exclude certain items, fell 8 percent to $1.21.

Industry analysts had on average forecast sales of $6.0 billion and earnings of $1.05 cents a share, according to Thomson Reuters.

Revenue from "externalisation", or the sale of rights to certain drugs, amounted to $780 million in the six months to June 30, with the largest chunk coming from a $450 million deal with Celgene.