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 The company's forecast implies a potential $3
billion upgrade to the consensus estimate from analysts and marks an
attempt to call a bottom to a sales decline driven by the loss of
exclusivity on several top-selling medicines.
Britain's second-biggest drugmaker is already suffering from generic
competition to its antipsychotic Seroquel, while its Nexium
treatment for excess stomach acid loses U.S. patent cover this year.
Top-selling Crestor, for high cholesterol, faces competition from
cheap copycat drugs in 2016.
The patent expiries leave AstraZeneca's sales on a near-term
downward spiral at a time when most of its rivals have put their
biggest patent losses behind them.
Shares in the group rose 1.6 percent by 1215 GMT on the more upbeat
outlook, against a 0.3 percent decline for the European healthcare
sector.
Chief Executive Pascal Soriot, who has been leading the company for
a little more than a year, will set out the new revenue guidance in
a presentation at the J.P. Morgan Healthcare conference in San
Francisco later on Tuesday.
The company will then give a more detailed update on its progress in
full-year results on February 6.
The consensus of analyst forecasts compiled by Thomson Reuters is
for 2017 revenue of $22.5 billion, down from the $25.8 billion
estimated for 2013. However, a number of the 2017 forecasts pre-date
the diabetes drug deal struck last month that is already expected to
add some $1 billion to $2 billion to annual revenue.
Citigroup analyst Andrew Baum said the positive medium-term outlook
reinforced his "more constructive thesis" for the stock, adding that
he expects Soriot to strike more earnings-boosting deals this year.
Panmure Gordon's Savvas Neophytou remains more wary, pointing out
that Soriot's predecessor, David Brennan, had made a similar attempt
to talk up AstraZeneca's longer-term prospects.
"In our view, management is stepping onto thin ice with this same
sort of guidance," Neophytou said, pointing out the previous
management's failure to hit its forecasts.
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DIABETES DEAL
AstraZeneca has become more confident about its revenue outlook
after the $4 billion deal last month to buy Bristol-Myers Squibb's
share of a diabetes joint venture. The acquisition is expected to
complete in the first quarter of 2014 and will boost sales
immediately. Mark Clark of Deutsche Bank said this was set to lift analysts'
revenue forecasts significantly, suggesting that a more realistic
"adjusted consensus" for 2017 was around $24.3 billion rather than
$22.5 billion.
Soriot has been striking a number of bolt-on deals to refill the
company's thin pipeline of new medicines and accelerating in-house
research programs.
The group now has 11 new-drug programs in late-stage Phase III
testing, almost double the number a year ago, and 27 in Phase II.
Hopes are particularly high for its cancer research, where it has
started trials for immunotherapy combination treatments for which
the first results are anticipated in 2014/15.
AstraZeneca is behind the likes of Bristol-Myers, Roche and Merck &
Co in the race to develop immunotherapies — a hot new area of cancer
research — but it is betting on combination treatments to help it to
catch up.
Immunotherapy, which harnesses the body's immune system to fight
cancer, has shown great promise in clinical trials and analysts
believe that the treatments may extend patients' lives significantly
and generate tens of billions of dollars in annual sales.
(Editing by David Goodman and Greg
Mahlich)
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