Covid product sales and profit margins would fall this year as pandemic recedes, AstraZeneca warns

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British Covid vaccine maker AstraZeneca warned on Thursday that sales of coronavirus products and profit margins would fall this year as the pandemic recedes.

AstraZeneca quickly developed a successful Covid-19 jab during the pandemic that generated full-year sales of nearly $4.0 billion (€3.5 billion) last year, the company said in a statement. results release.

After initially offering the vaccine at cost, Astra decided in November to start selling Vaxzevria – developed alongside Oxford University – for profit.

“Total Covid-19 drug revenues are expected to decline by a twenty to twenty percent,” AstraZeneca said Thursday.

AstraZeneca forecast that the group’s total revenue would rise this year, however, by a “high percentage of teenagers”, in part thanks to sales of the Evusheld antibody treatment.

The drug is intended for high-risk people who show resistance to coronavirus vaccines.

Astra added on Thursday that its net profit fell last year, hit by costs related to the massive takeover of US biotechnology company Alexion.

After-tax profit fell to $112 million (€98 million), from $3.2 billion in 2020. Revenue climbed 41% to $37.4 billion.

Chief Executive Pascal Soriot said that last year the company delivered on its “promise of broad and equitable access to our Covid-19 vaccine with 2.5 billion doses released into circulation worldwide”.

At the same time, the group faced huge costs following its takeover of Alexion for $39 billion, while significant impairment and restructuring charges also weighed.

Astra posted an annual pre-tax loss of $265 million, after a profit of $3.9 billion last time.

But its share price rose nearly 3.0% and neared the midpoint in London on Thursday. “The Covid vaccine has significantly raised Astra’s global profile,” said Hargreaves Lansdown analyst Keith Bowman.

“For now, and with new innovations and new drug successes on the way, the consensus opinion of analysts continues to point to a strong buy” in its shares.

Since taking charge of AstraZeneca in 2012, Soriot has pushed the company into lucrative treatments such as cancer therapies, and the Alexion takeover gives him more clout in areas such as treatment. blood disorders.

As for its Covid vaccine, “the time spent developing and distributing (the vaccine)…has been taken away from its core business,” Bowman added. “Buying Alexion at what is considered full price is also not yet fully justified.”

Astra’s Covid vaccination rollout in the EU was initially extremely slow due to a significant shortfall in the amount of doses the company had promised to the bloc, sparking a row between the parties.

The European Union has since turned to mRNA vaccines, particularly one produced by US drug giant Pfizer in partnership with its German counterpart BioNTech, after rare blood clot issues with AstraZeneca increased hesitancy of the public to take it.

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