AstraZeneca (AZN) is a U.K. based, global “full service” pharmaceutical corporation extensively engaged in research & development and marketing of a variety of medications. The current share price is hovering around $46. AstraZeneca markets a broad array of drugs, from neuroscience to infectious diseases. As of today, the company has 79 compounds in differing levels of clinical trials.

On October 1st, 2012, a new CEO, Pascal Soriot was appointed. His first act was to terminate a stock buyback plan to preserve capital. On October 25th, 2012, third quarter and nine month earnings were published. The material hard numbers are as follows:

1. Overall revenue fell by 19% CER
2. Emerging markets revenue increased by 6%, with revenue from China and Russia up 23%
3. Overall profits were down 50% compared to the third quarter 2011
4. Reported EPS was $1.22, down 50% from the third quarter of 2011
5. Core EPS target for 2012 remained at $6.00 to $6.30

The bad player responsible for such a large amount of lost revenue is the 95%

reduction in sales of Seroquel IR, from loss of patent exclusivity. Normally Seroquel IR constituted 16% of AstraZeneca’s total sales. To exacerbate the numbers, patent loss also affected sales of Atacand, Nexium, and Merrem. The loss or disposal of Astra Tech and Aptium represented about 2% of lost profits. Crestor sales fell 3% because of generic competition in Canada.

Explanation

AstraZeneca’s losses can be directly linked to the demise of patent exclusivity, generic competition, and government regulation. These are the same sad tunes all of Big Pharma is singing. Loss of patent exclusiveness haunts Pfizer (PFE), Novartis (NVS), Eli Lilly (LLY), andSanofi (SNY) and others. To continue reading, click here.