Year Established: 1999
Revenues: $24,384 (+10%)
Net Income: $1,227 (-40%)
R&D: $6,059 (+2%)
TOP SELLING DRUGS
|Farxiga||type 2 diabetes||$1,543||17%|
|Lynparza||fallopian tube cancer||$1,198||85%|
In 2019 AstraZeneca’s revenue for the year grew 10% to $24.4 billion driven by the performance of new medicines and emerging markets. Sales of new medicines increased by 59% to $9.9 billion, including new medicine growth in emerging markets of 75% to $1.9 billion. New medicines represented 42% of total product sales.
Sales grew across most regions during the year. Total emerging markets sales increased by 18% to $8.2 billion, with China sales leading the way with 29% growth. China sales in the fourth quarter increased by 25% to $1.2 billion. U.S. sales increased by 13% in the year to $7.8 billion while Europe sales declined by 2% in the year to $4.4 billion. Japan delivered strong sales, which increased by 27% to $2.5 billion.
Sales growth was reported across all of AstraZeneca’s therapy areas: Oncology was up 44% to $8.7 billion, new cardiovascular, renal and metabolism (CVRM) sales grew 9% to $4.4 billion and respiratory drug sales were up 10% to $5.4 billion.
The strong oncology performance continued to benefit from new medicines Tagrisso (+71%, $3.2 billion), Lynparza (+85%, $1.2 billion) and Imfinzi ($1.5 billion). In the oncology sector AstraZeneca has recently won regulatory approvals for Calquence and Enhertu, both anticipated to have a positive impact on revenue growth in 2020.
While newer cancer drugs had positive growth, performance from legacy oncology medicines in the year were off. Faslodex faced generic competition in the U.S. and it showed. Sales dropped 13% for the year to $892 million; sales in the fourth quarter alone fell 39%. At the same time, Iressa sales also declined in the year by 18% to $423 million and in the quarter by 29%. AstraZeneca says it anticipates continued declines for both medicines when 2020 results are reported.
In the new CVRM sector, sales increased by 9% in the year to $4.4 billion anchored by the strong growth of Farxiga (+11%, $1.5 billion) and Brilinta (+20%, $1.6 billion). Respiratory sales increased by 10% to $5.4 billion in the year driven by Pulmicort’s 14% growth to $1.5 billion, while Symbicort’s sales fell 3% to $2.5 billion.
As one of the company’s largest regions, at 35% of total product sales, emerging markets sales increased by 18% in the year to $8.2 billion, driven by 29% China sales growth to $4.9 billion.
Oncology sales in emerging markets were up 45% to $2.2 billion. New CVRM sales increased in the sector by 33% to $1.1 billion. Respiratory sales in emerging markets were strong too and grew by 21% to $2 billion.
In November 2019, AstraZeneca announced the creation of a global R&D center in Shanghai, China to carry out R&D for potential new medicines that will more than double the local R&D headcount to around 1,000.
Collaborations and alliances
During the year, AstraZeneca bolstered its cancer drug pipeline when it signed a deal with Daiichi Sankyo for a single cancer drug that could be worth up to $6.9 billion. The global development and commercialization collaboration agreement with Daiichi Sankyo is for Enhertu (DS-8201), a proprietary antibody-drug conjugate (ADC) and potential new targeted medicine for cancer treatment. AstraZeneca and Daiichi Sankyo will jointly develop and commercialize Enhertu worldwide, except in Japan where Daiichi Sankyo will maintain exclusive rights. Daiichi Sankyo will be solely responsible for manufacturing and supply.
AstraZeneca agreed to pay Daiichi Sankyo an upfront payment of $1.35 billion. Contingent payments of up to $5.55 billion comprise up to $3.8 billion for potential successful achievement of future regulatory and other milestones, as well as up to $1.75 billion of potential sales related milestones.
The two companies will share equally development and commercialization costs as well as profits from Enhertu worldwide, except for Japan, where Daiichi Sankyo will incur all costs and AstraZeneca will receive a royalty on sales.
On the cancer research front, AstraZeneca entered a three-year deal with Seres Therapeutics that will focus on advancing mechanistic understanding of the microbiome in augmenting the efficacy of cancer immunotherapy, including potential synergy with AstraZeneca compounds.
During the year, AstraZeneca and BenevolentAI began a long-term collaboration to use artificial intelligence (AI) and machine learning for the discovery and development of new treatments for chronic kidney disease (CKD) and idiopathic pulmonary fibrosis (IPF).
Scientists from the two organizations will combine AstraZeneca’s genomics, chemistry and clinical data with BenevolentAI’s target identification platform and biomedical knowledge graph—a network of contextualized scientific data (genes, proteins, diseases and compounds) and the relationship between them.
Machine learning systematically analyzes data to find connections between facts, and AI-based reasoning is used to extrapolate previously unknown connections. Together, the companies will interpret the results to understand the underlying mechanisms of these complex diseases and more quickly identify new potential drug targets.
As this issue went to press, AstraZeneca reached an agreement with Europe’s Inclusive Vaccines Alliance (IVA), spearheaded by Germany, France, Italy and the Netherlands, to supply up to 400 million doses of the University of Oxford’s COVID-19 vaccine, with deliveries starting by the end of 2020.
The IVA aims to accelerate the supply of the vaccine and to make it available to other European countries that wish to participate in the initiative.
AstraZeneca continues to build a number of supply chains in parallel across the world, including for Europe and expanding manufacturing capacity through collaborating with other companies in order to meet its commitment to support access to the vaccine at no profit during the pandemic.
The company has recently completed similar agreements with the UK, U.S., the Coalition for Epidemic Preparedness Innovations and Gavi the Vaccine Alliance for 700 million doses, and it entered a license agreement with the Serum Institute of India for the supply of an additional one billion doses, principally for low- and middle-income countries. Total manufacturing capacity currently stands at two billion doses.
In May, Oxford University announced the start of a Phase II/III UK trial of AZD1222 in about 10,000 adult volunteers. Other late-stage trials are due to begin in a number of countries.
The company’s pandemic response also includes rapid mobilization of AstraZeneca’s global research efforts to discover novel coronavirus-neutralizing antibodies to prevent and treat progression of the COVID-19 disease, with the aim of reaching clinical trials in the next three to five months. Additionally, the company has quickly moved into testing of new and existing medicines to treat the infection, including the CALAVI trials underway for Calquence (acalabrutinib) and the DARE-19 trial for Farxiga (dapagliflozin) in COVID-19 patients.