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AstraZeneca passes Pfizer to become UK’s biggest pharma firm

By Nagasunder in UK Business News, posted April 24, 2023

AstraZeneca has passed Pfizer to become the UK's biggest pharma firm.

A decade ago, Pfizer launched a hostile takeover for its rival, which was resisted.

Now, AstraZeneca has surpassed Pfizer in terms of market value - a watershed point in the company's revival.

AstraZeneca and the UK's second biggest pharma firm GSK are both releasing their latest quarterly results, as well as the main industry body, the Association of the British Pharmaceutical Industry, holds its annual conference

GSK's CEO, Emma Walmsley, recently said life sciences were at a "tipping point," as she urged the UK to reverse the reduction in clinical trials, accelerate new medication approvals, and deploy the latest therapies more quickly.

Pascal Soriot, CEO of AstraZeneca, also criticised the business climate, claiming that lower tax rates pushed the company to build a new factory in Ireland rather than the UK.

The pharmaceutical sectors is at odds with the government over the massive discounts it pays to the National Health Service, which are intended to cut the NHS's medications spending.

In recent years, Soriot has totally revamped AstraZeneca's medication portfolio, including the lung cancer drug Tagrisso, the leukaemia drug Calquence, and the diabete's drug Farxiga.

GSK is also restructuring its pipeline and has evolved into a more concentrated pharma and vaccines business following the spin-off of its consumer arm Haleon last summer.

Despite the afflictions of the UK scientific sector, AstraZeneca appears to be in good shape.

Following strong clinical trial outcomes in cancer, metabolic, and rare disease medicines, AstraZeneca's share price has grown 19 percent in the previous year and 140 percent in the last five years, putting the business at about £189 billion.

This compared to Pfizer's $227 billion (£182 billion).

AstraZeneca is now the most valuable firm on the London Stock Exchange.

GSK's share price has dropped 16 percent in the last year, bringing its market worth to £60 billion, in part due to fears over appeals in US cases alleging that its heartburn medicine Zantac caused cancer.

Russ Mould, investment director at the stockbroker AJ Bell, said AstraZeneca’s market value was a “glowing endorsement of M Soriot’s strategy,” explaining: “The company beat estimates consistently in 2022 and raised the forecast bar for 2023 back in February so expectations are high.”

On Thursday, the company is scheduled to post revenue of $10.7 billion for the January-March period, as well as core profits per share of $1.69.

This is lower than last year's first-quarter sales of $11.4 billion and core earnings of $1.89 per share.

Sales from its Covid-19 vaccination and antibody treatment are predicted to fall dramatically this year, implying that total 2023 sales would grow at a low-to-mid single-digit percentage rate, and at a low-double-digit rate excluding Covid treatments.

AstraZeneca is developing a new version of its Covid antibody medicine to protect people with weakened immune systems against all known viral types, with the goal of having it ready by the end of the year.

Its first medicine, Evusheld, lost its emergency approval in the United States in January due to the emergence of additional dominant strains.

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The company plans to begin 30 late-stage clinical trials this year and to market 15 new medications by the end of the decade, including some blockbusters with annual sales of more than $1 billion.

GSK is expected to report first-quarter revenue of £6.5 billion and profit before tax of £1.7 billion on Wednesday. This compares to £9.8 billion in revenue and £2.6 billion in profit a year ago when Haleon was included.

Mould said: “GSK is behind AstraZeneca in some ways when it comes to reshaping itself but it may be catching up fast after the Haleon spin-off, a welcome tidying up of its balance sheet and ongoing investment in its drug development pipeline, either via its own R&D or acquisition,”.

Last week, GSK bought Canada’s Bellus Health for $2bn, the maker of a chronic cough medicine.

Source: The Guardian

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