Stock Watch: AstraZeneca And Clovis Diverge In Oncology Sales Recovery

Sales And Marketing Spending Correlates With Revenue Performance

AstraZeneca’s controversial switch to for-profit COVID-19 vaccine pricing and the costs of the Alexion acquisition clouded its strength in oncology. Meanwhile, Clovis's tight grip on its marketing purse strings may have hit revenue recovery.

Stock Watch Image, Andy Smith
ANDY SMITH OFFERS A LIFE SCIENCE INVESTOR'S PERSPECTIVE ON BIOPHARMA BUSINESS

Analysts’ estimates of AstraZeneca’s profitability failed to take into account the impact on its margins of the not-for-profit COVID-19 vaccine and the costs of the Alexion acquisition.

AstraZeneca PLCdescribed its third-quarter financial results as being bolstered by the acquisition of Alexion Pharmaceuticals Inc. To paraphrase Spiderman’s uncle, with great acquisitions come great costs. Partly as a result of that transaction, total revenues increased by 50% on the same quarter of 2020, and by 20% on the second quarter of 2021. Revenues beat analysts’ consensus estimates by 3%, but core (non-GAAP) earnings per share (EPS) missed analysts’ estimates by nearly 13%. AstraZeneca’s announcement and conference call focused on the year to date, rather than the most recent quarter. This was probably because “the costs associated with the vaccine and the integration of Alexion” pushed AstraZeneca into a quarterly GAAP EPS loss. Investors reacted with an almost 7% stock price drop compared with the NYSE Arca Pharmaceutical Index’s 0.4% fall

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