AstraZeneca leaps after smashing first-quarter forecasts

By Eva Mathews and Maggie Fick

(Reuters) - AstraZeneca sailed past market expectations for quarterly revenue and profit on Thursday, boosted by demand for its blockbuster drugs and steady sales from partnered medicines and sending its shares up over 5%.

Oncology, the Anglo-Swedish drugmaker's top business, delivered a 26% jump in first-quarter sales to $5.12 billion.

Shares in the FTSE 100 firm were up 5.2% to 119.46 pounds at 0905 GMT, having touched May 2023 highs and on track for their biggest one-day gain in more than two years.

CEO Pascal Soriot has rebuilt the company's pipeline of new drugs since taking the helm more than a decade ago, with blockbusters such as lung cancer drug Tagrisso, leukaemia drug Calquence and Farxiga for diabetes.

Combined revenue from partnered medicines, such as breast cancer therapy Enhertu with Daiichi Sankyo and asthma medicine Tezspire with Amgen, jumped more than 60% in the quarter.

The second largest London-listed company by market value reported core earnings per share of $2.06 on a 19% year-on-year rise in revenue to $12.68 billion. That beat the profit of $1.92 per share on revenue of $11.84 billion expected by analysts in a company-compiled consensus.

"U.S. rights Research & Development (R&D) investment remains high but that's certainly bearing fruit, and with six Phase III trials initiated since the year end, there could be more to come," said Derren Nathan, head of equity research for Hargreaves Lansdown.

"Of course, there's a high likelihood that they won't all lead to new revenue streams, but the company's record of success is impressive."

R&D expenses rose about 18% to $2.7 billion, while sales, general and administration costs were up 13% on higher marketing spend for new drug launches.

AstraZeneca stuck to its forecast for total revenue and core earnings per share to increase by low double-digit to low teens percentages in 2024.

The company, which will host its first investor day in a decade on May 21, said two weeks ago it would raise its annual dividend by 7% this year, betting on a strong performance and cash generation from its top drugs and recent acquisitions.

Other businesses, such as rare diseases, and respiratory and immunology, also saw double-digit percentage growth in quarterly sales.

Asked on a call with journalists on Thursday whether he thought his new pay was adequate, top boss Soriot said that the company as a whole needed to attract global talent in part through competitive compensation.

The pharma industry is global but a lot of the talent is based in the U.S., where salaries are higher, he said, and innovation in the industry is "now more and more driven by the United States and China, Europe is unfortunately falling behind".

(Reporting by Eva Mathews in Bengaluru and Maggie Fick in London; editing by Mark Potter and Jason Neely)