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AstraZeneca Q4 Oncology Revenues Grow 20 percent

NEW YORK – AstraZeneca said on Thursday that fourth quarter 2021 revenues increased 62 percent, driven by its oncology therapeutics business.

For the three months ended Dec. 31, the company reported total revenues of $12.01 billion compared to $7.41 billion during the same period in 2020 and coming in above the average Wall Street estimate of $10.96 billion.

Sales in the oncology segment in Q4 2021 accounted for a third of the company's total revenues at $3.92 billion, a 20 percent increase over Q4 2020. The EGFR-inhibiting cancer treatment Tagrisso (osimertinib) was the top-selling drug in the oncology segment in Q4 2021 with revenues growing 14 percent to $1.31 billion from the prior year's quarter.

Over the same period, the PARP inhibitor Lynparza (olaparib), approved for breast, ovarian, and other tumors harboring BRCA1/2 mutations or homologous recombination repair deficiencies (HRD), brought in sales of $1.03 billion, a 25 percent increase.

AstraZeneca recorded a loss of $346 million, or $.22 per share, in Q4 2021, compared to a profit $1.01 billion, or $.78 per share, in Q4 2020. Core non-GAAP EPS during the quarter was $1.67. On average, analysts had expected EPS of $.73.

The firm's R&D expense increased 50 percent to $2.58 billion in Q4 2021 compared to $1.72 billion in the prior-year period. It's selling, general, and administrative expenses were $5.12 billion in the quarter, growing 59 percent from $3.21 billion in Q4 last year.

For the full year in 2021, AstraZeneca reported total revenues of $37.42 billion, a 41 percent increase from $26.62 billion in 2020. On average, analysts had expected revenues of $36.27 billion.

Sales from the oncology segment comprised 37 percent of the firm's total revenues at $13.66 billion, which was a 19 percent increase compared to 2020. Over the 12-month period, sales of Tagrisso increased 16 percent to $5.02 billion, and Lynparza increased 23 percent to $2.75 billion.

Enhertu (trastuzumab deruxtecan), sold as a HER2-positive advanced breast and gastric cancer treatment, which AstraZeneca comarkets and codevelops with Daiichi Sankyo, brought in $214 million in collaboration durign the year. Global sales of Enhertu during fiscal year 2021 were $426 million compared to $202 million (excluding Japan) the prior fiscal year. Daiichi Sankyo recorded US in-market sales $357 million in fiscal year 2021 compared to $200 million in fiscal year 2020. 

Dave Fredrickson, executive VP of AstraZeneca's oncology business unit, highlighted during a conference call to discuss the company's financials that 2021 was the first time that Lynparza exceeded $2 billion in revenues, driven by greater use in ovarian, prostate, and breast cancer as well as by greater uptake of HRD testing. The drug's performance triggered a $400 million sales milestone from AstraZeneca's co-development and co-marketing partner Merck.

Enhertu became the number one treatment in third-line HER2-positive metastatic breast cancer in 2021, and continued to grow in second-line gastric cancer. "Together with our partner Daiichi Sankyo, launch efforts are in full swing," Fredrickson said, "as we prepare for the eagerly anticipated global approval of Destiny-Breast03," data from which supports Enhertu as a second-line HER2-positive metastatic breast cancer treatment.

Tagrisso also hit a milestone by passing the $5 billion sales mark for the first time. In the US and Europe, Tagrisso sales benefitted from longer duration of treatment among EGFR-mutated metastatic NSCLC patients and increased uptake as an adjuvant treatment. However, this growth was partially offset by declining lung cancer diagnosis rates due to the pandemic.

"Last quarter we commented that oncology diagnosis rates were improving. However, [the SARS-CoV-2] Omicron [variant] has stalled that recovery," Fredrickson said, estimating that at the end of 2021, cancer diagnosis rates were still 5 percent to 15 percent below pre-COVID-19 levels, with lung and ovarian cancer diagnoses rates impacted particularly negatively.

In 2021, AstraZeneca reported a profit of $115 million, or $.08 per share, compared to a profit of $3.14 billion in 2020, or $2.44 per share. Core non-GAAP EPS during the year was $5.29, above analysts' consensus estimate of $3.21.

The firm's R&D expense increased by 62 percent during 2021 to $9.74 billion from $5.99 billion in 2020. Selling, general, and administrative expenses were $15.23 billion in 2021, growing 35 percent from $11.29 billion in the prior year.

Looking ahead, Susan Galbraith, AstraZeneca's executive VP of oncology R&D, said that a data readout is expected in 2022 from the DESTINY-Breast-04 trial, in which the firm is comparing Enhertu against physician's choice of treatment in HER2-low unresectable or metastatic breast cancer patients. Eligible patients can have either hormone receptor (HR)-positive or -negative disease but must have immunohistochemistry staining of 1+ or 2+ for HER2 expression or be negative by in situ hybridization. The primary endpoint is progression-free survival in hormone receptor-positive patients, and patients' outcomes will be evaluated based on their IHC HER2-expression scores.

Based on data from earlier studies, "the activity that we're seeing [with Enhertu] in the lower end of the IHC 1+ group is still significantly improved compared with the current estimates with standard-of-care chemotherapy," Galbraith said, adding that AstraZeneca "will continue to work on improving lab scoring techniques and … patient selection using computational pathology."

As of Dec. 31, AstraZeneca had $6.33 billion in cash and cash equivalents.

AstraZeneca CFO Aradhana Sarin cautioned during the call that the pandemic is still negatively impacting diagnosis rates in several disease settings including oncology, which could impact revenues in 2022. The company is expecting revenues this year to increase by a high-teens percentage at constant exchange rates and core EPS to increase by a mid-to-high twenties percentage.