AZ raises forecast, slaps premium price on Brilinta

AstraZeneca ($AZN) beat analysts' estimates for sales and profits, and it boosted its earnings forecast by 10 cents a share. But the numbers are almost incidental to a few other announcements AZ chose to make. For instance: The company has settled almost all its U.S. lawsuits over the antipsychotic drug Seroquel. As of July, Reuters reports, the company had resolved 28,461 liability claims, leaving only about 250 left to deal with. The total tab increased by $55 million, to $647 million.

Then there's the pricing news on its just-approved-by-FDA drug Brilinta. The clotbuster will bear a wholesale cost of $7.24 per day, almost 20% more than the $6.08 wholesale price on its chief rival, the Bristol-Myers Squibb/Sanofi drug Plavix. Plus, it's 25% higher than the $5.78 wholesale cost of Eli Lilly's new blood thinner Effient, which is also trying to grab a share of the Plavix market.

"AstraZeneca believes Brilinta should be priced at a premium because of its label and the safety and efficacy versus [Plavix]," the company said in a statement, according to CardioBrief. "Drugs like this are the reason I got into this business," CEO David Brennan enthused to CNBC.

AstraZeneca cites a huge study that showed Brilinta beating out Plavix in safety and efficacy, but that research delivered problematic North American data, apparently because treatment in U.S. typically includes high-dose aspirin, where elsewhere, lower aspirin doses are used. Brilinta's label will carry a black box warning against using it with high-dose aspirin, and the company will have to scramble to persuade doctors to change their aspirin protocols.

Sanford Bernstein analyst Tim Anderson, who's a bit of a Brilinta skeptic, commented on the pricing plans by saying that, "given the competitive dynamics in the antiplatelet category," the wholesale cost seems high. Generic copies of Plavix will hit the market next May, making Brilinta's price seem even more expensive. That "will give payers one more reason to push Plavix ahead of Brilinta," Anderson said (as quoted by CardioBrief).

Finally, AstraZeneca announced that its share-repurchasing push could come to $5 billion by year's end, rather than the $4 billion previously estimated. That, of course, would be possible thanks to the drugmaker's recent deal to sell its AstraTech dental unit. MF Global analyst Justin Smith applauded the idea, Reuters notes, and raised the firm's price target on AZ stock: "Although more than 50% of the increase in guidance is driven by increased share buyback, in our view this reflects strong financial and strategic discipline from management."

- read the Reuters news
- get more from CardioBrief
- check out the CNBC piece

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