AstraZeneca executives try to shift I-O focus with China, Brilinta wins

You know executives are over the immuno-oncology questions when one of them offers to hand out a bottle of champagne to the first person to ask a question about cardiovascular, metabolic or respiratory medicines. And that’s what happened 58 minutes into AstraZeneca’s third-quarter earnings call.

As they have in recent quarters, analyst queries focused on PD-L1 Imfinzi and various combinations of the med that are currently in trials, while CEO Pascal Soriot and team attempted to steer attention to other parts of the portfolio.

And in Q3, the C-suite had plenty to tout. Key non-oncology meds, such as blood thinner Brilinta and SGLT2 diabetes product Farxiga, beat (PDF) consensus and posted growth of 30% or more, racking up sales of $284 million and $285 million, respectively.

AZ also saw its emerging market segment “roar,” as Bernstein analyst Tim Anderson put it, expanding by 10%. Declining blockbuster Crestor didn’t sink as badly as expected, either, hauling in $580 million to top $513 forecasts. And within the oncology portfolio, hot PARP contender Lynparza generated $81 million, beating consensus of $73 million.

“All of this will see us emerge as a fast-growing company in the not-so-distant future,” Soriot told investors on the call.

The end result? Revenue came in at $6.23 billion, well ahead of the $6 billion consensus mark. Core earnings per share of $1.12 beat by two cents, and AZ said its 2017 EPS would hit toward the “favorable end” of the low-to-mid teens percentage decline it had previously outlined.

That’s not to say the quarter went perfectly. Operating expenses, which Anderson called “the leading edge of the ‘return to growth story,’” came in higher than expected, and gross margin of 79.6% hit below Wall Street’s 80.1% forecast.

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And the analyst focus on I-O is no surprise, given the big questions still looming over AZ’s franchise. Over the summer, a closely watched tandem of Imfinzi and CTLA4 tremelimumab missed its marks in a phase 3, front-line lung cancer trial, failing to outperform chemo or solo Imfinzi at staving off disease progression. Now, all eyes are on the pair and its forthcoming overall survival data, which the company expects in the first half of next year.

“It is quite possible that that will be a positive result” despite the progression-free survival miss, R&D chief Sean Bohen reminded investors. And if it is, it could have implications for both Bristol-Myers Squibb—which is trialing a similar approach—and Merck and Roche, which went the chemo combo route.

RELATED: Can AstraZeneca's Calquence really siphon share from AbbVie and J&J's Imbruvica?

In the meantime, though, AZ has plenty going on; it recently won an approval for mantle-cell lymphoma med Calquence, which analysts expect to give Johnson & Johnson standout Imbruvica a serious run for its money. It’s also awaiting regulatory nods for Imfinzi in the lung cancer maintenance setting; the British drugmaker has filed for approval in seven geographies, it said.