AstraZeneca is the largest drug manufacturer in Britain. It has set a bold goal to achieve $80bn ($63bn) by 2030 through treatments for cancer and rare diseases.
Pascal Soriot, the chief executive of the company, presented the growth plan to shareholders in Cambridge, England. He said that 12 new drugs, including five cancer treatments, would generate revenues in excess of $5bn at their peak.
The Anglo-Swedish Pharmaceutical Company made revenues of $45bn in 2014. This was a year earlier than the target it set as part of its defense against a PSD70bn hostile bid from US rival Pfizer.
Soriot announced that AstraZeneca had entered a new growth era. “The breadth and depth of our portfolio, along with the continued investment in innovative products, support sustained growth long beyond the end of this decade.”
He said that the firm’s strong position on emerging markets will be crucial to reaching its growth goals. It is the biggest drugmaker in China by sales and has an important research and development center in Shanghai.
AstraZeneca’s drug pipeline has been revamped under Soriot, and a portfolio of rare disease, cancer, cardiovascular and metabolic medicines have been developed.
Its share price has grown slowly in the last year, to just below 2%. The company’s top-selling diabetes drug, Farxiga will lose its patent protection next year. Revenues in the industry are also expected to be affected by reforms that allow the US government negotiate drug prices for first time.
The UK drugmaker announced earlier this month that it has started the worldwide withdrawal of Covid-19 jab because of a “surplus” of updated vaccines. The vaccine that saved over 6.5 million people’s lives, according to estimates by independent experts, can’t be easily adapted to the new variants, unlike Pfizer/BioNTech or Moderna shots which use mRNA technology.
AstraZeneca revealed plans on Monday to build a $1.5bn plant in Singapore for the production of a promising, new generation cancer-killing drug called antibody-drug-conjugates. These are engineered antibody-drug conjugates that bind tumour cells and release chemicals to kill them without harming healthy tissue.
The company also plans to enter the weight loss drug market, with a pill for obesity and diabetes that it licensed in November from China’s Eccogene.
Russ Mould said that AstraZeneca “reaching for stars” with their new sales target. This sent shares up 1.2% on Tuesday, making them second largest risers on the FTSE 100.
Mould continued: “AstraZeneca could easily achieve this goal by going on a spending spree to buy rival companies. AstraZeneca, however, suggests that it will achieve the goal organically which would make the achievement all the more impressive.
“Chief Executive Pascal Soriot has been in the spotlight before over his large pay package. Perhaps he’s trying to justify it with the new growth strategy.” The goal will generate significant value for shareholders, and certainly Soriot himself as a part of his bonus plan is based on the company’s performance.
Soriot is in line for a maximum pay package of £18.7m this year, which was described by the High Pay Centre thinktank as “excessive” and sparked shareholder revolt last month.
Mould said that the task of developing new medicines was not easy, due to the high failure rate and revenue reductions once patents expired, which allowed generic drugmakers produce cheaper versions.
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