AstraZeneca AZN-Q forecast higher 2022 sales and raised its annual dividend for the first time in a decade on Thursday after beating fourth-quarter profit expectations, but warned the boost from its COVID-19 products would fall.
The London-listed company began earning a modest profit from its COVID-19 vaccine and early data has shown both its antibody treatment and a booster dose of the vaccine work against the Omicron variant.
However, the company said sales of COVID-19 products were expected to decline by a low-to-mid 20s percentage this year, and that the gross profit margins from those products would be lower than the company average.
An expected decline in sales of the vaccine is likely to be only partially offset by growth in sales of the antibody drug, Evusheld, it said, with the majority of vaccine revenue in 2022 expected to come from initial contracts.
AstraZeneca expects overall 2022 revenue to increase by a high teens percentage, with core earnings growing by a mid-to-high 20s percentage. Sales last year jumped 38 per cent to $37.42-billion at constant currency rates.
For 2022, analysts currently estimate earnings per share of $6.68 and sales of $42.73-billion, according to Refinitiv IBES data.
Its shares gained around 4 per cent by 0900 GMT, as some investors had braced for a weaker performance this year.
“There had been significant investor anxiety coming into today’s guidance issuance, and with overall 2022 consensus numbers not likely to change on the back of the update, we believe the overhang should be largely lifted,” analysts at J.P. Morgan said in a note.
AstraZeneca, which has said low-income nations would continue to receive its vaccine on a no-profit basis, set up a separate unit to focus on its coronavirus efforts and other respiratory infections.
The vaccine, with sales of $3.9-billion, was the second best-selling product for the year for the Anglo-Swedish company, second only to lung cancer drug Tagrisso, which racked up over $5-billion in revenues, highlighting the importance of the shot for AstraZeneca in its first year since launch.
Rivals Pfizer PFE-N and Moderna MRNA-Q have forecast 2022 sales for their COVID-19 vaccines of about $32-billion and $18.5-billion respectively, while also expecting other multi-billion-dollar COVID-sales.
AstraZeneca’s ChAdOx1 nCoV-19 shot, sold under the brands Vaxzevria and Covishield with more than 2.6 billion doses supplied as of February, is a major weapon against the pandemic but is yet to get U.S. approval.
The company expects to submit the vaccine for U.S. regulatory approval in the first half of the year, much later than the original timetable for 2021.
AstraZeneca also said it would raise its annualized dividend by $0.10 to $2.90 per share. “AstraZeneca continued on its strong growth trajectory in 2021 with … five of our medicines crossing (the) blockbuster threshold,” Chief Executive Pascal Soriot said, referring to products that generate more than $1-billion per year in sales.
Total revenue jumped 63 per cent to $12.01-billion for the three months to Dec. 31 on a constant-currency basis, while core earnings per share (EPS) came in at $1.67 cents, topping estimates of an EPS of $1.50 on sales of $10.79-billion.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.