AstraZeneca (AZN) has received a range of new product approvals in recent months, including for multiple oncology drugs and treatments for asthma, autoimmune disease, and chronic heart failure. In addition, it continues to make acquisitions, recently acquiring CinCor Pharma and Neogene Therapeutics, writes Jasper Hellweg, analyst at Argus Research.

We are maintaining our BUY rating on Focus List selection AZN, in part because the company has announced several positive portfolio developments over the past several months. On April 3, 2023, the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) recommended a European marketing authorization for Ultomiris for the treatment of adult patients with neuromyelitis optica spectrum disorder (NMOSD), a rare and debilitating autoimmune disease that affects the central nervous system (CNS), who are anti-aquaporin-4 (AQP4) antibody positive (Ab+).

In addition, on March 23, Chinese regulators granted conditional approval for Calquence, a selective Bruton’s tyrosine kinase (BTK) inhibitor, for the treatment of adult patients with mantle cell lymphoma (MCL) who have received at least one prior therapy. For reference, MCL is typically an aggressive rare form of non-Hodgkin lymphoma (NHL) that accounts for 2%- 6% of all patients diagnosed with NHL in China. This is the first approved indication for Calquence in China.

AstraZeneca Plc (AZN)
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Elsewhere in the company’s portfolio, Chinese regulators approved Enhertu on February 24 as a monotherapy for the treatment of adult patients with unresectable or metastatic HER2-positive breast cancer who have received one or more prior anti-HER2-based regimens. The approval, which is the first for Enhertu in China, was based on Phase 3 results in which Enhertu demonstrated a 72% reduction in the risk of disease progression or death vs. trastuzumab emtansine, which is marketed by Genentech as Kadclya.

Moving on to financials, AstraZeneca reported 4Q22 results on Feb. 9. Adjusted EPS fell to $1.38, down 5% in constant currency but $0.71 above the consensus forecast. The GAAP after-tax profit was $902 million or $0.58 per share, up from a loss of $346 million or $0.22 per share a year earlier.

Total revenue was $11.21 billion (-7% as reported, +1% in constant currency). Product sales were $10.80 billion (-6% as reported, +2% in constant currency). For the full year, adjusted earnings rose 33% in constant currency to $6.66 per share, while revenue rose 24% to $43.0 billion.

AstraZeneca pays an annualized dividend of $1.45 per ADR, for a yield of about 2.1%. The company pays dividends twice a year, announcing them with its second and fourth-quarter results, with the larger payment after the end of the fiscal year. Our dividend estimates are $1.48 per ADR for 2023 and $1.52 for 2024.

Recommended Action: Buy AZN.

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