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AstraZeneca increases R&D investment after 48% rise in revenues

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AstraZeneca has recorded a 48 per cent rise in revenue in the first half of 2022 - a performance that CEO Pascal Soriot said had enabled the company to increase investment in research and development.

The Cambridge-headquartered biopharmaceutical company has also updated its full year forecast, with revenues now expected to rise by a percentage in the low twenties, rather than the high teens.

This is partly because growth in its Covid-19 medicine Evusheld, for the immunocompromised, will offset the decline in sales of its vaccine Vaxzevria.

Pascal Soriot, chief executive officer of AstraZeneca
Pascal Soriot, chief executive officer of AstraZeneca

Total revenues rose to $22.16bn (£18.2bn) over the half-year, with growth drive across all its disease areas and by its £28bn acquisition of US rare disease business Alexion.

But shares in the company actually drifted lower on Friday (July 29) after it confirmed a 53 per cent decline in operating profits to $1.4bn (£1.15bn) for the first half of the year.

CEO Pascal Soriot said: “AstraZeneca had a strong financial first half of 2022, and great pipeline delivery. We announced practice-changing data for several medicines including Enhertu in breast cancer, Farxiga in heart failure and Ultomiris in neuromyelitis optica spectrum disorder.

“We have made great progress in our efforts to combat Covid-19. Vaxzevria is estimated to have saved more than six million lives during the first year of roll-out, and Evusheld has protected hundreds of thousands of immunocompromised people, enabling them to return to a more normal life. Evusheld continues to demonstrate activity against new variants.

The Discovery Centre on Cambridge Biomedical Campus
The Discovery Centre on Cambridge Biomedical Campus

“Given the ongoing performance of our underlying business and the contribution of our Covid-19 medicines, we are updating our revenue guidance for 2022.

“This has enabled us to increase our R&D investment in the exciting number of pipeline opportunities that can benefit patients and drive long term sustainable growth for our company. We look forward to announcing the results of several important late-stage trials this year and next.”

The company’s core operating margin was 33 per cent, while core total operating expense also rose by 33 per cent, reflecting the addition of Alexion, along with investment in new launches and the pipeline to build industry-leading mid-to-long term growth.

The core earnings per share was $3.61.

Leif Johansson will retire as AstraZeneca chair at the end of the April 2023 AGM
Leif Johansson will retire as AstraZeneca chair at the end of the April 2023 AGM

AstraZeneca, which officially opened the Discovery Centre - its $1bn R&D site on Cambridge Biomedical Campus - in 2021, also confirmed that current board executive Michel Demare will take over as the company’s chair from Leif Johansson next year.

Leif is retiring at the end of the company’s AGM in April 2023.

He said: “I am delighted that Michel will succeed me following the 2023 AGM. He is an internationally respected leader with extensive experience in strategy, planning, execution, governance and corporate stewardship and a proven track record leading multinational companies, as well as experience of the pharmaceutical industry gained at Baxter and as a member of the AstraZeneca board. I look forward to undertaking a comprehensive handover in the coming months and to seeing the continued development and success of AstraZeneca.”

Michael Demare will take over as AstraZeneca chair
Michael Demare will take over as AstraZeneca chair

Michel was appointed in September 2019 as an independent non-executive director and is chair of the company’s remuneration committee and a member of the audit committee and nomination and governance committee.

He is also a non-executive director of Vodafone Group and Louis Dreyfus Int’l Holdings BV, chairman of IMD Business School and chairman of Nomoko AG.

Je said: “I could not be prouder to be named chair-designate of the board of AstraZeneca and am excited to have the opportunity to build on Leif’s success as chair and work with Pascal and members of the board and senior executive team when I take on my new role in 2023.”

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