CORRECT: =UPDATE: AstraZeneca Ups Targets, Buybacks

29th Jul 2010 10:00

("=UPDATE: AstraZeneca Ups Targets, Buybacks; Brilinta Hopes Rise" published at 0829 GMT misstated the net profit figure. The same mistake occurred in an item published at 0635 GMT. The correct version follows:) By Sten Stovall Of DOW JONES NEWSWIRES LONDON (Dow Jones)--AstraZeneca PLC (AZN) Thursday lifted its full-year financial targets and doubled its 2010 share buyback programme after reporting second-quarter profits that beat forecasts and winning backing from a U.S. advisory panel for its potential blockbuster blood thinner Brilinta. The U.K.'s second-biggest drugmaker, which reports in dollars, raised its full-year core earnings per share target again, to the range of $6.35 to $6.65. AstraZeneca also doubled its target for net share repurchases for 2010 to $2 billion from its initial target of $1 billion, after completing net share repurchases of $516 million. Chief Executive David Brennan said in a statement, "Our second quarter performance reflects continued strong growth in our Emerging Markets and good performance for key brands Crestor, Seroquel and Symbicort. While revenue and core EPS comparisons become more challenging in the second half of the year, we have increased our full year financial targets." Analysts said the market was mostly focusing on Wednesday night's vote by a Food and Drug Administration panel which backed use of Brilinta, a proposed anticlotting drug developed by AstraZeneca, despite concerns the product might not work in U.S. patients. Data from a study considered by the panel compared Brilinta with Sanofi-Aventis' (SAN.FR) Plavix and showed U.S. patients had "worse results" with Brilinta. But the FDA said part of the reason could have been that the aspirin dose was "generally higher" in U.S. portion of the study, which included 1,413 patients, or possibly because of differences in the overall level of care. The positive news flow boosted AstraZeneca's shares more than 5% in early trading. At 0820 GMT the stock was 4% higher at 3330 pence. "We believe we can expect as much as 17-20% upgrades to consensus in the next few months. These could start as early as today following Brilinta endorsement, said Savvas Neophytou, analyst with Panmure Gordon & Co, who has a buy on the stock and a share price target of 3600 pence. Still, the company cautioned that its second-half results later this year will probably be less robust due to generic drug competition and reduced sales of its H1N1 pandemic flu vaccine, making for tough comparables. The company now expects a low single-digit decline in revenue in 2010 in constant currency terms. "The share buyback increase is a way of inducing investors to hold the stock in the short-term while the pipeline news develops, so the Brilinta vote overshadowed today's results, said Evolution Securities analyst Dominic Vlader. Collins Stewart analyst Emmanuel Papadakis, who has a sell recommendation on the stock, said Thursday's results were "the last pre-key-patent-expiry set of results for AstraZeneca, with Brilinta's recommendation the last of the significant expected positive newsflow. We would advise taking profits post a very strong run that is likely to start reversing the second half of 2010." AstraZeneca said its net profit for the three months to end-June increased to $2.11 billion from $1.71 billion a year earlier, well ahead of analyst expectations of $1.94 billion as revenue rose to $8.18 billion from $7.96 billion, beating the $8.03 billion expected in a survey of 13 analysts. At constant-exchange rates, revenue rose 9%. AstraZeneca said its U.S. revenue declined by 4%, reflecting the impact of generic competition for blood pressure treatment Toprol-XL, children's asthma medication Pulmicort Respules and cancer treatmentCasodex. Revenue in the rest of the world was up 5%, largely due to a 16% increase in emerging markets, which accounted for approximately 75% of the revenue growth outside the U.S. It announced a dividend of $0.70 for the quarter. -By Sten Stovall, Dow Jones Newswires; +44 207 842 9292; [email protected] (END) Dow Jones Newswires July 29, 2010 05:00 ET (09:00 GMT)