For the first time, AstraZeneca's top-selling medicine isn't a stomach drug or a respiratory inhaler or any other primary care med. It's a cancer drug.
That would be Tagrisso, the EGFR inhibitor for lung cancer, which zoomed past AstraZeneca's former top-seller, Symbicort. Tagrisso jumped 86% year over year to $630 million in first-quarter sales, while Symbicort, the asthma and COPD therapy, sank 8% to $585 million.
Tagrisso's ascendance was just part of AstraZeneca's outsized performance in oncology for the quarter—and a signal that the company's cancer-fueled "return to growth" is right on track.
After nearly a decade of decline on patent losses, the British drugmaker started posting quarterly sales growth in the third quarter of last year. It did so again this time around, aided by a whopping 59% growth in oncology sales to $1.89 billion. And CEO Pascal Soriot again sketched out future top-line boosts, thanks to its cancer drugs and burgeoning China business.
Tagrisso continues to benefit from its 2018 approval in newly diagnosed non-small cell lung cancer (NSCLC) patients, and, despite U.S. destocking, its first-quarter revenue beat analyst expectations, Jefferies analysts said Friday. And Iressa, Tagrisso’s predecessor, delivered a surprising 13% beat: Tagrisso's expansion has squeezed Iressa to near-nonexistent sales in the U.S., but emerging markets—led by China—made up the gap. The drug delivered $134 million on the quarter.
Meanwhile, Lynparza "continues to cement itself as the leading PARP inhibitor with the first-line ovarian cancer launch underway," Soriot said on a Friday briefing with reporters. Lynparza, which AZ now shares with Merck, doubled its sales to $228 million for the period.
And the company's immuno-oncology drug Imfinzi kept growing in NSCLC, though its quarterly sales of $295 million still fell behind Roche’s rival PD-L1 Tecentriq—and even further from the blockbuster PD-1s Keytruda and Opdivo from Merck and Bristol-Myers Squibb, respectively. The company pared back its Imfinzi development work in the first quarter, too; it canned a phase 1 combining Imfinzi with Iressa in NSCLC, and a phase 2 testing Imfinzi alongside its investigational PD-1, MEDI0680, in solid tumors.
But cancer is just one pillar of AstraZeneca's growth plans. In the words of Wolfe Research analyst Tim Anderson, AstraZeneca's emerging markets business is "doing great," and China was the centerpiece of that in the quarter. Sales in the country jumped 28% at constant currencies to $1.24 billion. That's 23% of AstraZeneca's top line, Soriot pointed out. And it pushed AZ to the top spot by sales in China, where it pushed aside the longtime No. 1, Pfizer.
AstraZeneca's growth in China isn't likely to hit such heights later this year, though, Soriot warned. The company expects 15% to 20% increases moving forward, rather than the 25% to 30% it’s been delivering lately. The downshift stems partly from a bulk purchase scheme the Chinese government is testing for 11 cities. The so-called "4+7" procurement plan allocates a large share of public hospitals’ drug demand to the winning bidder in exchange for steep discounts.
For drugmakers, that means large amounts of guaranteed sales and lower marketing expenses, provided they win the contract. If not, the sales opportunity dwindles.
While Iressa made the cut—and Soriot expects volume growth from that deal will be substantial—AZ’s statin drug Crestor lost out to a locally made generic. Its first-quarter sales show it, too; China dealt a 6% drop in Crestor sales, to $137 million, "partly a result of Crestor being unsuccessful in the ‘4+7’ pilot tender scheme," the company said.
All told, AZ’s first-quarter sales gained 14% at constant currencies, to $5.47 billion, and beat consensus by 3%, Jefferies said.
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