AstraZeneca reports sales drop for Evusheld. Why is the variant-busting COVID med underachieving?

AstraZeneca’s Evusheld is a one-of-its-kind preventative for COVID-19. So why aren’t more people using it?

Its effectiveness has been clearly demonstrated and it stands up to all versions of the omicron variant. Most of all, the prophylactic power of the injected antibody is tailor-made for a large and underserved patient population—the immunocompromised who can’t get adequate protection from vaccines.

Friday morning, when AZ reported second-quarter earnings, sales of Evusheld came in at $445 million—a startling decline from the $469 million generated in the first quarter.

In the U.S., where the therapy was authorized for emergency use in December of last year, AZ has sold $556 million of Evusheld in the first six months of the year. Anticipating the need for Evusheld, the U.S. has agreed to purchase 1.7 million doses at a cost of $855 million. But the treatment isn’t exactly flying off shelves.  

“We need to get full approval in the U.S. to be able to fully promote it. It’s fundamental to be able to establish the product,” AZ CEO Pascal Soriot said during a conference call.

In Europe, where Evusheld was sanctioned for use in March, AZ has collected just $143 million in sales.

“It is really important to make sure that we do our best to educate and increase the awareness for both patients and (doctors),” Iskra Reic, AZ’s EVP, vaccines and immune therapies, said. “Our investment is increasing and we want to resource that in the proper way to make sure we drive demand.”  

As a combination of two “different but complementary antibodies,” as Reic described them, Evusheld was designed to retain durability against variants. But there is no guarantee that it will be effective against the next iteration of the virus, leaving open the question: Will AZ miss its window of opportunity?

For now, AZ has raised its annual revenue projection to more than a 20% increase over 2021 and is using the expectation of boosted sales of Evusheld as one justification. To that end, the company is working with the FDA toward a full approval of the antibody combo.

AZ pulled in $10.77 billion in revenue overall in the quarter to top the analyst consensus and rout last year’s second quarter figure of $8.22 billion—which did not include sales from acquired rare disease specialist Alexion—for a 31% increase.

The U.K. pharma's diverse portfolio—which produced 12 blockbuster products last year—kept chugging along in the second quarter as Tagriso ($1.4 billion), Farxiga ($1.1 billion) and Soliris ($1 billion) all saw double-digit growth from the second quarter of last year.

Sales of the company’s other COVID product, Vaxzevria, are fading fast. After generating sales of $3.91 billion last year and remaining steady in the first quarter ($1.1 billion), the vaccine made just $451 million in the second quarter.    

Amid the positive news, Bloomberg analyst John Murphy threw some cold water on the results.

“AstraZeneca’s 2% revenue and 10% EPS beats in 2Q look great, except that the earnings beat is driven by a much lower-than-expected tax rate,” Murphy wrote. “Though the company has raised full-year guidance, this is almost all driven by higher sales of COVID medicine Evusheld.”

AZ also said that board chairman Leif Johansson will retire in April of next year and the head of the board’s renumeration committee Michel Demare will step in as the chairman-designee.