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AstraZeneca PLC Earnings - Analysis & Highlights for Q4 2024
Overview
PositivesNegativesOutlook
- BioPharmaceuticals medicines saw another very strong year of performance in 2024 with total revenue growing 21% to $21.9 billion.
- The company received FDA approval and NCCN guideline inclusion for DESTINY-Breast06, which will further drive adoption in the ultralow setting.
- The company is excited to share that it has recently completed the Phase IIb PURSUIT trial for AZD0780, its oral PCSK9 inhibitor, and looks forward to sharing the data at the American College of Cardiology Annual Meeting next month.
- The company is fully committed to continue growing in China and sees a strong opportunity in the longer term.
- The inhaled market has slowed down, and there will not be a major difference in market share.
- SG&A costs are expected to grow at a slower pace than revenue.
- There is a downside pressure of the increased manufacturer liability.
- The company expects some headwinds specifically driven by VBP inclusion for several medicines.
- The company expects to see a fourth blockbuster medicine in the respiratory portfolio.
- The company expects SG&A costs to grow at a slower pace than revenue.
Q&A Highlights from AstraZeneca PLC Earnings Call Q4 2024
- Analyst asked about the impact of the gross margin on the company's performance and whether it will continue to impact the company's performance in the future.
- Aradhana Sarin, Chief Financial Officer, explained that the gross margin impact is not a one-time event and that the company expects to continue to see a 60 to 70 basis point impact on gross margins due to the net effect of Part D payments. She also mentioned that the company is seeing increased adherence in the oral Oncology portfolio due to the co-pay cap being set at $3,300 in 2024, which resulted in a reduction in free goods and an improvement in adherence.
- Aradhana Sarin, Chief Financial Officer, explained that the gross margin impact is not a one-time event and that the company expects to continue to see a 60 to 70 basis point impact on gross margins due to the net effect of Part D payments. She also mentioned that the company is seeing increased adherence in the oral Oncology portfolio due to the co-pay cap being set at $3,300 in 2024, which resulted in a reduction in free goods and an improvement in adherence.
- Analyst asked about the company's confidence in meeting the recently revised FDA guidelines for the primary endpoint of the AZD5004 study and the enrollment pace in those studies.
- Sharon Barr, Executive Vice President and Head of Research and Development, responded that the company is confident in meeting the recently revised FDA guidelines for the primary endpoint of the AZD5004 study and that the enrollment pace in those studies is on track. She also mentioned that the company is moving beyond short-term weight loss targets and thinking about the interconnectedness of cardiovascular, renal, and metabolic disease.
- Sharon Barr, Executive Vice President and Head of Research and Development, responded that the company is confident in meeting the recently revised FDA guidelines for the primary endpoint of the AZD5004 study and that the enrollment pace in those studies is on track. She also mentioned that the company is moving beyond short-term weight loss targets and thinking about the interconnectedness of cardiovascular, renal, and metabolic disease.
- Analyst asked about the company's differentiation strategy for its oral PCSK9 with Phase IIb data, which is scheduled to be presented at the ACC in March.
- Pascal Soriot, Chief Executive Officer, explained that the company's differentiation strategy for its oral PCSK9 with Phase IIb data is based on its ability to address interrelated disease, such as cardiovascular, renal, and metabolic disease. He also mentioned that the company is focused on expanding the access to these important medicines in emerging markets, where the needs are enormous.
- Pascal Soriot, Chief Executive Officer, explained that the company's differentiation strategy for its oral PCSK9 with Phase IIb data is based on its ability to address interrelated disease, such as cardiovascular, renal, and metabolic disease. He also mentioned that the company is focused on expanding the access to these important medicines in emerging markets, where the needs are enormous.
- Analyst asked about the cost of goods for efzimfotase compared to Strensiq.
- The cost of goods for efzimfotase is much lower than Strensiq due to several factors, including the development plan for both pediatric and adult populations and the regional expansion.
- The cost of goods for efzimfotase is much lower than Strensiq due to several factors, including the development plan for both pediatric and adult populations and the regional expansion.
- Analyst asked about CapEx after 2025.
- CapEx projects are multiyear projects, and the company expects them to continue for at least four or five years. If there are new projects started, such as great success with the GLP-1 or something, they will announce those separately.
- CapEx projects are multiyear projects, and the company expects them to continue for at least four or five years. If there are new projects started, such as great success with the GLP-1 or something, they will announce those separately.
- Analyst asked about the launch type and potential in the TROPION-Breast01 setting.
- The company sees a broad potential in that population due to the size of the market and the opportunity to treat patients with TB01. TB01 complements DB04, which is transforming the HER2 landscape, and there is an option to treat patients with TB01 after seeing an ET and a chemotherapy in the form of an ADC. The company has a comprehensive breast program to address all patients presenting with breast cancer.
- The company sees a broad potential in that population due to the size of the market and the opportunity to treat patients with TB01. TB01 complements DB04, which is transforming the HER2 landscape, and there is an option to treat patients with TB01 after seeing an ET and a chemotherapy in the form of an ADC. The company has a comprehensive breast program to address all patients presenting with breast cancer.
- Analyst asked about the hypertension disease prevalence.
- The company estimates that 5% to 8% of patients suffering from hypertension have this disease, and there is an incredible high unmet medical need. Physicians came proactively to the company to do a study in this patient population.
- The company estimates that 5% to 8% of patients suffering from hypertension have this disease, and there is an incredible high unmet medical need. Physicians came proactively to the company to do a study in this patient population.
