AstraZeneca's second-quarter results continue the generics-are-woe trend in Big Pharma. This time, it's the antipsychotic drug Seroquel doing most of the damage. It fell over the patent cliff at the end of March, as the first quarter drew to a close, so AZ's ($AZN) sales took a full three months' worth of damage from generic competition. Result: a 57% decline in Seroquel franchise sales, to $647 million, a loss of some $900 million.
That single patent loss accounted for 80% of the decline in U.S. sales, and the lion's share of AZ's overall revenue drop of 21%, to $6.66 billion (hold the "Exorcist" comments, please). Together with generic erosion on the cardiovascular drugs Atacand and Toprol, and the cancer drug Arimidex, the drug's demise accounted for 15 percentage points of that 21% hit.
Other drugs helped ease the Seroquel pain. The cancer drugs Iressa (up 13%) and Faslodex (up 24%), and the diabetes remedy Onglyza (up 72%), for instance. Small gains, in the double-digit millions, but at this point, every bit helps. Another positive, though rather backhanded, is the fact that the statin drug Crestor didn't fall off much in the face of competition from generic Lipitor. Crestor sales sustained a 1% drop in the U.S., to $787 million.
Interestingly, an attempt at supply-chain efficiency cost AZ sales as well. Some 2 percentage points of the revenue decline stemmed from problems with implementing a new IT system at a plant in Sweden. The problems have now been worked out, AZ says, and the plant is filling back orders and restoring distribution. Those problems will weigh on full-year results by about 1%, AZ says.
- see the release from AZ (PDF)
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