AstraZeneca alters earnings forecast

Source: Reuters

Date :19/11/2008 20:52:26

Anglo-Swedish drugmaker AstraZeneca saw shares plummet 11 percent on Wednesday after it said its full-year earnings per share (EPS) would be at the lower end of its previously stated range.

By Ben Deighton

Earnings would be hit by about $0.16 per share after it signed a distribution and supply deal with Par Pharmaceutical for an authorised generic of its asthma drug Pulmicort.

It said the deal is in response to the launch of a generic by rival Teva , even though the drug is still covered by an AstraZeneca patent. AstraZeneca has filed a temporary restraining order against the company.

As a result it predicted EPS will be near the bottom of the $4.90 (3.25 pounds) to $5.05 range communicated with its third-quarter financial results.

The news coincided with the announcement of mixed results from AstraZeneca's late-stage trial for its lung cancer treatment Zactima on Wednesday, after which its stock fell on worries about the firm's relatively thin pipeline of new drugs to replace blockbusters facing generic competition.

AstraZeneca said its trial for Zactima, one of a new class of drugs called TK inhibitors, met its key goal in combination with Sanofi-Aventis's chemotherapy treatment Taxotere, but not with Eli-Lilly's Alimta.

The results also showed the drug did not perform better than Roche Holding Genentech's and OSI Pharmaceuticals' Tarceva, the first of the TK inhibitors.

Analyst Simon Mather said that the results meant the drug would be useful in about 40 percent of second line patients suffering from non small cell lung cancer, the most common form of lung cancer.

"Initial headlines indicate that the product may be useful in approximately 40 percent of the estimated 50,000 second line NSCLC patients, i.e those who currently receive Taxotere or pemetrexed (Alimta) as a monotherapy," he said, adding that the results were broadly in line with his expectations.

However, Deutsche Bank analysts said in a note that "with Alimta and Tarceva moving into a 1st-line maintenance setting and other new agents on the way, we view Zactima as having largely missed its commercial opportunity in lung."

Overall, the tests, whose primary goal was prolonged progression free survival in non small cell lung cancer, showed that there were advantages to combining the drug with chemotherapy treatments, the company said.

AstraZeneca suffered a disappointment in February this year when its lung cancer drug Recentin failed to meet goals in mid-stage trials.

At 10:49 a.m., shares in AstraZeneca were down 120 pence at 26.85 pounds. They have risen 28 percent in the past year, outperforming the FTSE 100 index by 84 percent.

(Editing by Elaine Hardcastle and Simon Jessop)

LONDON (Reuters)