AstraZeneca’s Prescription For Growth Includes Cancer Treatments, Weightloss Drugs, and a New $80B Sales Target - The Average Joe


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    AstraZeneca’s Prescription For Growth Includes Cancer Treatments, Weightloss Drugs, and a New $80B Sales Target

    Rhea Lobo

    June 12, 2024

    Savior of lives, pioneer of solutions, and an alchemist that conjures up profits — AstraZeneca ($AZN) is an icon, a legend, and the moment in the pharmaceutical industry. Britain’s most valuable company is on a mission to nearly double its revenues to $80B by 2030, but getting there won’t be easy.

    Astral (revenue) projections: AstraZeneca’s stock keeps reaching new all-time highs, achieving over 100% growth in the past five years (with total returns even higher when factoring in its 3% dividend yield) — outpacing the S&P 500’s 88% return. AstraZeneca has achieved five consecutive years of revenue growth, fueled by successful drugs like Farxiga for diabetes and Tagrisso for cancer treatment. But reaching their new target hinges on the success of upcoming key late-stage trials expected to generate $20B in revenue by 2030.

    • AstraZeneca anticipates that 12 of the 20 new launches could each exceed $5B in peak-year revenues.
    • Five are new cancer drugs (AstraZeneca’s largest business), while the others focus on hormone and cell therapy innovations.

    AstraZeneca’s health quest

    AstraZeneca remains competitive due to strong research and development investments, a diversified product portfolio, and deep pockets. In recent years, the company has invested billions into large acquisitions and partnerships — with little signs of slowing.

    • Looking to make weight loss drugs cheaper and more accessible, AstraZeneca paid $2B to license an experimental weight loss pill.
    • AstraZeneca is also trying to stay ahead of the innovation curve — by acquiring Fusion Pharmaceuticals for $2.4B, which is developing cancer treatments using radiopharma, another rapidly growing area of medicine.

    Trouble in pharmaland: Regulatory pressures and geopolitical tensions risk putting a stop to AstraZeneca’s plans. A US federal court ruling now mandates pharmaceutical companies negotiate drug prices with Medicare — potentially slashing profits by 25-60%. The company is also developing a separate supply chain in China, hoping that Chinese drug sales will help achieve its revenue target and ease US-China tensions. Fortunately for investors, AstraZeneca reached its $45B revenue target last year — a goal initially set in 2014. Now, it’ll need to do it all over again.

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