Broker snap: Generic competition to continue at AstraZeneca

28th Apr 2011 12:36

Matrix says it has "significant concerns" related to AstraZeneca's ability to deliver revenue growth amid generic competition, and keeps its 'reduce' rating on the drugs giant after its first quarter results.The group reported on Thursday that sales in the first three months of the year were down 4% (in constant exchange rate terms) at $8.29bn, a miss against the broker's revenue expectations of $8.45bn.Generic competition is said to be hurting sales in the US and Europe and Matrix expects this trend to continue for some time, as the group faces several high-profile patent expirations over the coming years."We still do not see any substantive evidence of delivery from the pipeline, which leads us to believe that there may be higher hurdle rates for AstraZeneca to show revenue growth over the coming years, this increases the risks of a dilutive M&A deal (mid-sized)," said analyst Navid Malik.The target price is left at 2,806p.---bc