AstraZeneca's sales slumped by a bigger-than-expected 19 percent in the third quarter, underscoring the challenges confronting the drugmaker's new chief executive, Pascal Soriot.
Faced with patent expires on once best-selling medicines and a thin pipeline of new drugs, the former Roche executive, who joined on Oct. 1, needs to re-focus operations and step up the hunt for acquisitions, analysts believe.
In his first day in office, Soriot suspended the group's share buyback programme to increase financial flexibility as the group undergoes a strategy review, which is expected to be presented to investors in the first quarter of 2013.
Soriot signalled on Thursday he did not see any dramatic shift away from the current focus on pharmaceutical innovation, rather than diversification, saying his priority was to restore the company to growth and scientific leadership.
That still leaves scope for increased deal-making, however, and bankers have speculated on potential acquisitions ranging from small and mid-sized biotech firms to specialty pharma companies like Forest Laboratories and Shire.
Sales in the quarter were $6.68 billion, generating core earnings, which exclude certain items, down 12 percent at $1.51 a share. The strength of the dollar against most major currencies was a drag on results.
Industry analysts, on average, had forecast sales in the quarter of $6.75 billion and earnings of $1.44 a share, according to Thomson Reuters I/B/E/S.
Britain's second-largest drugmaker reiterated its forecast for a fall in full-year core earnings to between $6.00 and $6.30 a share, against $7.28 in 2011.
AstraZeneca is a pure pharmaceuticals group, without the cushion of alternative revenue streams found at more diversified rivals, increasing its need to find new prescription drugs - something its labs have struggled to do in recent years.
Loss of exclusivity on antipsychotic medicine Seroquel has been a major blow to sales and profits this year and AstraZeneca also faces more big patent losses in future, with heartburn pill Nexium and cholesterol fighter Crestor losing U.S. protection in 2014 and 2016 respectively.
It is not alone in struggling with sales losses in Western markets. Eli Lilly, Bristol-Myers Squibb and Novartis also missed quarterly sales forecasts.
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