AstraZeneca’s Q1 slips on Crestor copycats. Could a trio of oncology drugs deliver for 2018?

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AstraZeneca CEO Pascal Soriot said the negative effects of the Crestor patent expiries will recede materially in the second half. (AstraZeneca)

An aging blockbuster's downfall can drag down a pharma company’s entire top line. For AstraZeneca, that drug was its legacy statin Crestor, whose 42% plunge put a big dent in the British pharma's first-quarter sales.

Crestor sales nosedived to $389 million, well below analyst expectations of $446 million, thanks to cheaper copycats that continue to eat away at branded sales, especially in Europe and Japan.

That sharp decline counteracted strong growth among AstraZeneca's newer drugs—including Lynparza, Tagrisso, Imfinzi, Brilinta and Farxiga—leading to a 2% top-line drop, excluding currency effects. Core operating profits also plummeted by 47%.

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CEO Pascal Soriot rushed to calm investors, trying to draw their attention toward the potential of those newer brands. In a Friday release, he said Crestor's freefall was expected and won’t affect its full-year forecast. “[T]he effects of the Crestor patent expiries in Europe and Japan will recede materially in the second half,” and newer drugs could “[pave] the way for our anticipated return to growth in 2018,” he said.

RELATED: The top 15 pharma companies by 2017 revenue - AstraZeneca

He might have a point. As Bernstein analyst Tim Anderson, M.D., noted in a Friday report to clients, key oncology products Tagrisso, Imfinzi and Lynparza all did well.

Lung cancer drug Tagrisso, which Anderson sees as AZ’s “most meaningful product over time,” nabbed $338 million for the period, $14 million above consensus expectations. And the drug just got a significant boost in April with a U.S. nod in first-line patients, expanding its market—and potential for 2018 sales—substantially. AZ’s executives think the new approval clears the way for Tagrisso's run at a $3 billion sales target.

The picture for checkpoint inhibitor Imfinzi isn't quite so clear. After the disastrous initial failure of the Mystic trial triggered a stock price landslide last July, Imfinzi's bid for its own first-line nod still hangs in the balance. But for the first quarter, its $62 million sales also beat consensus. Lynparza, originally approved for ovarian cancer, benefited from an FDA approval in January to treat BRCA-mutated breast cancer and saw sequential quarterly U.S. sales grow 22%.

Cardiovascular therapy Brilinta and SGLT2 inhibitor Farxiga both came through with nearly $300 million in sales.

RELATED: AstraZeneca's Mystic trial hits another snag, delaying Imfinzi's lung cancer expansion

With double-digit growth, China continues to be a bright spot for AZ. For the first time in the company’s history, quarterly sales from the country exceeded $1 billion. Anderson noted that China makes up about 21% of AstraZeneca's total first-quarter sales, “vastly exceeding the region's contribution to any of our other covered companies.”

“This is good … as long as it keeps growing,” he wrote.

The Bernstein analyst appears to think Soriot has managed to right the ship after the Mystic fall and Crestor patent cliff, having rated the drugmaker as “outperform” since last September. It remains to be seen whether Soriot can make good on his perhaps overly ambitious $45-billion-by-2023 revenue goal, and some investors continue to take issue with the CEO's pay. Last April, AZ shareholders revolted against Soriot’s 2016 compensation package, and they might do it again at the company’s annual meeting today, according to Reuters.

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