British pharmaceutical giant AstraZeneca (AZN, Financial) has raised its annual forecast following strong demand for its cancer drugs. The company plans to invest approximately $3.5 billion in its U.S. operations by the end of 2026. AstraZeneca's latest financial results show an increased growth forecast for 2024 earnings per share, moving from around 15% to approximately 18% growth.
In the third quarter, AstraZeneca's flagship cancer drug, Tagrisso, was a major contributor to exceeding sales expectations, alongside the strong performance of the new drug, Enhertu. The company reported $13.565 billion in total sales for Q3, marking a 21% year-over-year increase, while core earnings per share rose 27% to $2.08.
Tagrisso generated $1.674 billion in Q3 sales, up 17% from the previous year. The drug, known generically as Osimertinib, treats non-small cell lung cancer (NSCLC) in patients with EGFR mutations and helps those who have developed resistance to other EGFR-TKI treatments.
AstraZeneca plans to invest heavily in the U.S. market, which accounts for double the sales of its European market. This investment includes new facilities in Cambridge, Massachusetts, and Maryland, as part of a larger global expansion effort. However, analysts noted concerns regarding the development of the experimental cancer drug, Dato-DXd, as AstraZeneca and partner Daiichi Sankyo Co Ltd have withdrawn and resubmitted their application to the FDA to cover a broader patient group.
The company's operations in China, where officials are investigating potential illegal imports of cancer drugs, have faced challenges. Despite this, AstraZeneca reported a 15% increase in China sales compared to the previous year, with growth in the European and other emerging markets as well.
While AstraZeneca's obesity drug assets showed promising safety results in ongoing clinical trials, the company's CEO emphasized the importance of the Chinese market and AstraZeneca's willingness to cooperate with authorities, despite no formal investigation notice being received.
AstraZeneca aims to double its sales to approximately $80 billion and launch 20 new drugs by 2030, with cancer treatments playing a pivotal role in reaching these targets. Following the earnings announcement, AstraZeneca's shares briefly rose by 3% in London trading but have seen a 5.8% decline so far this year, underperforming the broader market.
