AstraZeneca has supplied one billion doses of its Covid-19 shot to 170 countries - but the drug-maker’s “not-for-profit” heroics are proving a drag on finances.
The Cambridge-based firm’s shares slumped 1.5% to 8151.5p this morning despite its reporting a 24% leap in revenues in the first-half of 2021 to $15.3billion.
Net profit jumped 40% to $2.1billion driven by sales in emerging markets, particularly China.
But gross profit margin declined by 7% to 73.5%, reflecting what the firm called the “significant impact of the equitable supply, at no profit, of the pandemic Covid-19 vaccine.”
Sales of the vaccine, developed with Oxford University, hit $1.2billion in the six months but pale in comparison to US rival Pfizer, whose jab brought in $7.8billion in the same period.
AstraZeneca has supplied more than 80 million doses to developing countries via the Covax global access initiative, making up more than 90% of Covax supply.
It intends to continue providing the jab at cost price for the duration of the pandemic.
Looking ahead, it raised full-year profit guidance in expectation that the $38billion purchase of Boston-based biotech Alexion will enhance its drugs pipeline.
CEO Pascal Soriot said: “Our long-term goals to accelerate scientific discovery, invest for sustainable growth and deliver more benefits for patients remains unchanged.”
Sheena Berry, equity research analyst at Quilter Cheviot, said: “AstraZeneca’s core business continues to generate good growth with sales up by a quarter on the month.
“Even without factoring in the revenue from the Covid-19 vaccine, sales of other pharmaceutical lines increased by 12% to $7.3bn, 2% higher than expectations.
“Demographic trends and the swelling middle classes in emerging markets continue to act as a big tailwind for the pharmaceutical business, with EM sales up 31% and sales in China up 12%.
“AstraZeneca has updated its guidance following the completion of the Alexion acquisition last week. Alexion specialises in orphan drugs to treat rare diseases, and offers both margin expansion and Improved cash generation for the wider group.
“AstraZeneca has increased revenue guidance from the low-teens to the low-twenties percentage, excluding any contribution from the Covid-19 vaccine, but it seems likely this may prove to be a conservative estimate.”