AstraZeneca ($AZN) seems to be all over Asia in research and licensing deals with CEO Pascal Soriot and his team also noting on the July 30 earnings call it is one of the few companies confident of double-digit sales growth in China this year--even with a bit of a dip in the second quarter.
|AstraZeneca CEO Pascal Soriot|
But first, Soriot spoke about Japan and high hopes for AZD9291, a once-daily, selective, irreversible EGFR tyrosine kinase inhibitor (TKI) to treat advanced EGFR non-small cell lung cancer. The candidate AZD9291 was submitted to U.S. and EU regulators in the second quarter.
"Japan follows this quarter (third) which is record speed for oncology regulatory submissions," Soriot said. "So as you know we have big hope for (AZD9291) in Japan because in Asia, of course, EGFR mutated lung cancer is very frequent."
But in response to an analyst question, Mark Mallon, executive vice president for international, noted the Japanese submission differs from the FDA category.
"It's not exactly an accelerated approval," Mallon said. "The Japanese call it a priority review. But at the end of the day it's a reduction of the time of the review and it can come down to about 9 months. The Japanese have regularly reduced their review times and with a priority review one can estimate that the product will be approved 9 months later."
|AstraZeneca's Luke Miels|
Then onto China where Luke Miels, executive vice president for Global Product and Portfolio Strategy & Corporate Affairs, discussed strong performances by Symbicort and Pulmicort.
"Both had notable growth in emerging markets, particularly in China," Miels said.
"In asthma and COPD, the larger patient populations and a trend from acute to chronic maintenance treatment continued to make China a significant opportunity."
"For Pulmicort, up 43%. It remains the leading product in China with a run rate of nearly ($500 million) a year. While as we look to the future, Symbicort, up 64% is increasing rapidly to approximately a fourth of that."
Miels then updated on the pace of China growth.
"After a very brisk Q1 with 18% growth overall (in emerging markets), and 28% in China, Q2 normalized to 9% growth, in line with our long-term view. China sales were slower in Q2, with a growth of 10% equating to 19% over the half year," he said. "Going to the second half of 2015, our expectation is to deliver continued double digit growth in China."
Miels then broadly discussed the overall slowdown in China for the pharmaceutical market and the economy, but did not seem too concerned.
"If we look at China, I think it's fair to say that there is a structural slowing in the market, which I don't think is a surprise to anyone who's following the overall economy in China," he said.
"That being said, where our focus is, clearly we have a strong position in the large eastern provinces. But as we go to lower-tier cities in the west, we have a concentrated expansion program there. Also, our mix of products right now, there is a lot of volume reflex. Of course, if you do see pricing pressure with products such as Crestor and Nexium, you do tend to see an offset in terms of volume."