AstraZeneca Q4 Adj. Profit Misses View, To Buy Actavis' Respiratory Drug Unit

(RTTNews) - British drug maker AstraZeneca plc (AZN.L, AZN) on Thursday reported a loss for the fourth quarter that narrowed from last year despite lower revenues. However, core earnings per share for the quarter missed analysts' expectations, and revenues matched their estimates.

AstraZeneca also said it has agreed to acquire the rights to Ireland-based specialty pharmaceutical company Actavis Plc's (ACT) branded respiratory business in the U.S. and Canada for an initial consideration of $600 million on completion and low single-digit royalties above a certain revenue threshold.

In addition, AstraZeneca will pay Actavis an additional $100 million, while Actavis has agreed to a number of contractual consents and approvals, including certain amendments to the ongoing collaboration agreements between the two companies. The transaction is expected to close in the first quarter of 2015.

AstraZeneca's fourth-quarter pre-tax loss narrowed to $580 million from last year's $715 million. Loss attributable to owners of the parent narrowed to $321 million or $0.25 per share from $524 million or $0.42 per share in the year-ago period.

Core earnings per share for the quarter was $0.76, compared to $1.23 per share last year. On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.85 per share. Analysts' estimates typically exclude special items.

Revenue for the quarter declined 2 percent to $6.68 billion from $6.84 billion in the year-ago period. Analysts expected revenue of $6.68 billion.

The company noted that the decline in revenues reflected the strength of the U.S. dollar against key currencies.

U.S. revenues for the quarter were flat with last year at $2.64 billion. Growth platforms were strong, aided in part by the impact of completing the acquisition of BMS's share of the global diabetes alliance.

Diabetes products provided $157 million of incremental revenue, with growth from Symbicort and Brilinta helping to offset declines in revenue from brands such as Nexium, Seroquel IR, and Synagis, in addition to the $113 million reduction in fourth-quarter revenue taken against product brands related to the change in accounting for the Branded Pharmaceutical Fee.

Revenue in the Rest of World decreased 17 percent to $851 million, while revenue in Europe declined 6 percent to $1.71 billion. Meanwhile, revenue in Emerging Markets rose 8 percent, with an 18 percent increase in China.

For fiscal 2014, AstraZeneca's net profit was $1.23 billion or $0.98 per share, down from $2.56 billion or $2.04 per share in the prior year. Core earnings for the year was $4.28 per share, compared to $5.05 per share in the previous year.

Revenue for the year rose 1 percent to $26.10 billion from $25.71 billion last year.

Street expected the company to report earnings of $4.36 per share for the year on revenues of $26.16 billion.

As at 31 December 2014, AstraZeneca's pipeline included 133 projects, of which 118 are in the clinical phase of development.

Further, AstraZeneca's board declared a second interim dividend of $1.90 per share, bringing the dividend for the full year to $2.80.

Looking ahead to fiscal 2015, AstraZeneca forecast core earnings per share to increase by low single-digit percentage and sales revenue to decline by mid single-digit percent, both at constant exchange rates or CER. Based on current exchange rates, the company forecasts core earnings per share to be broadly in line with 2014 and sales revenue to decline by low double-digit percent.

Analysts expect the company to earn $4.21 per share for the year on revenues of $24.50 billion.

The company said it is on track to return to growth by 2017 and is well positioned to deliver its long-term goals.

Under the deal with Actavis, AstraZeneca would own the development and commercial rights in the U.S. and Canada to Tudorza Pressair and Daliresp, both drugs for chronic obstructive pulmonary disease or COPD. The two products had combined annual sales in the U.S. of nearly $230 million in 2014.

Also, AstraZeneca would own development rights in the U.S. and Canada for LAS40464, the combination of a fixed dose of aclidinium with formoterol long acting beta agonist (LAMA/LABA) in a dry powder inhaler, which is approved in the EU under the brand name Duaklir Genuair.

AZN is trading at $69.74, down $1.32 or 1.86 percent on a volume of 345,199 shares.