AstraZeneca Resilient Despite Mixed Q1 Results and Challenges in Key Markets

AstraZeneca, the FTSE 100 pharmaceutical giant, has reaffirmed its full-year forecasts despite posting mixed first-quarter results and grappling with potential headwinds in major markets. The company reported a 10 per cent increase in total revenue, reaching $13.6 billion, driven by strong double-digit growth in cancer treatments and biopharmaceuticals. However, this result fell slightly short of the $13.8 billion anticipated by analysts, causing some fluctuation in its share price.

Sir Pascal Soriot, the company’s long-serving chief executive, hailed the record revenues, which are more than double the first quarter of 2020 levels. He highlighted AstraZeneca’s transformation into Britain’s most valuable public company under his tenure, citing progress in achieving the firm’s ambitious target to nearly double revenue to $80 billion by 2030. Soriot described this as an “unprecedented, catalyst-rich period” for the company.

Despite the impressive revenue growth, the company faced challenges. Weak performance in its rare diseases portfolio—attributed to US payment reforms—and a slight delay in certain tenders to the second quarter curbed even higher gains. Additionally, AstraZeneca is navigating ongoing investigations and regulatory issues in China and potential import tariffs in the United States, its two largest markets. Shares dipped earlier in the year due to these pressures but closed higher after the earnings announcement.

The company remains confident that full-year total revenue will grow by a “high single-digit percentage” and that core earnings per share will increase by a “low double-digit percentage” at constant currencies. AstraZeneca celebrated five positive phase III trial results during the quarter, alongside 13 regulatory approvals in key regions since February. Major late-stage trial readouts expected this year could generate peak annual revenue exceeding $10 billion, according to the company.

While AstraZeneca continues to enjoy success in its oncology pipeline, the discontinuation of a phase III trial for Truqap, a prostate cancer drug, drew attention. Soriot described the outcome as an inevitable aspect of innovation, emphasising the company’s strong success rate in phase III trials, which remains at an industry-leading 80 to 85 per cent.

Meanwhile, the company is addressing regulatory challenges in China. A Shenzhen city customs investigation into alleged unpaid import taxes of $1.6 million related to its new breast cancer drug, Enhertu, could lead to fines between one and five times the unpaid amount. Additionally, the firm is cooperating with Chinese authorities on separate probes into potential data protection breaches and historic employee misdeeds. AstraZeneca has made significant internal changes to address these issues, reaffirming its commitment to the Chinese market.

Sir Pascal Soriot reassured investors of AstraZeneca’s resilience, noting that pricing pressures and regulatory scrutiny in key markets were manageable. The company’s focus remains on continued innovation, operational efficiency and its robust drug pipeline to sustain long-term growth.