AstraZeneca Says Profit Rises 37 Percent

LONDON – Pharmaceutical company AstraZeneca PLC said Thursday its first-quarter earnings rose 37 percent, driven by growth from its main drugs and cost controls, and raised its forecast for the full year.

The company also announced that it had sold its U.S. anesthetic and analgesic business to Abraxis Bioscience Inc. for $350 million and would pay $200 million to co-promote Abraxis’ breast cancer drug Abraxane in the United States.

AstraZeneca, Britain’s second-largest drugmaker by sales, posted a first-quarter profit of $1.42 billion, up from $1.04 billion in the comparable period last year. Sales rose 7.6 percent to $6.18 billion.

"This outcome gives us confidence for the remainder of the year, and we have increased our financial targets," said Chief Executive David Brennan.

The Anglo-Swedish drugmaker now expects earnings per share in 2006 to be in a $3.60-$3.90 range.

AstraZeneca shares gained 0.9 percent to 30.18 pounds ($53.91) in trading on the London Stock Exchange.

The drugmaker said that the combined sales of its five key products – heartburn drug Nexium, antipsychotic Seroquel, cholesterol medicine Crestor, cancer treatment Arimidex and asthma inhaler Symbicort – increased 25 percent.

AstraZeneca reported "very aggressive" results that were significantly ahead of the year-ago quarter – itself a record-breaking performance, Charles Stanley analyst Jeremy Batstone said in a broker note.

But he said that while earnings growth is likely to be robust, doubts remain regarding the strength of the company’s drug pipeline.

AstraZeneca, which is facing a challenges from generic drug makers to several of its key drugs over the next few years, acknowledged earlier this year that it needs to strengthen its thin pipeline of drugs in development.

Peter Cartwright, an analyst at Williams de Broe PLC in London, said the deal with Abraxis was "not a company-transforming deal, it’s an interesting, just tidying-up at the fringe deal."

Abraxis, based in Schaumburg, Ill., has worldwide rights to Abraxane, which is marketed in the United States for metastatic breast cancer and is being developed for other breast, lung, ovarian and prostate cancers, melanoma and head and neck cancers.

"This deal gives AstraZeneca access to the key U.S. chemotherapy market," said Tony Zook, president and CEO of AstraZeneca U.S.

Dr. Patrick Soon-Shiong, chairman and CEO of Abraxis BioScience, said the agreements "represent an important step in executing our strategic plan to build Abraxis Bioscience into a global, fully integrated biopharmaceutical company."

Subject to approval by U.S. regulators, AstraZeneca will pay Abraxis for co-promotion rights for 5 1/2 years. AstraZeneca will provide sales representatives to support Abraxane and will fund half the promotional and advertising program.

In return, AstraZeneca will be paid a commission of 22 percent of Abraxane net sales in the United States, reduced to 10 percent and then 5 percent in the two years following the end of the agreement.