The focus of
AstraZeneca 's (NYSE: AZN) earnings report
illustrates the nature of polar opposites with one-time gains
and new drugs. One is to be largely ignored, while the other
will drive the drugmaker's future.
Revenue was 5% higher year over year, but about half of
that was due to one-time gains.
Novartis (NYSE: NVS) had to withdraw its
copycat of heart drug Toprol-XL, in a move that led to a
windfall for AstraZeneca, but generic competition has
returned. The company also got a windfall from its swine flu
vaccine. Like
GlaxoSmithKline (NYSE: GSK) and Novartis,
AstraZeneca will see another boost in the fourth quarter, but
let's hope -- for society's sake -- not much after that.
On the new-drug front, things aren't quite as rosy.
Onglyza, AstraZeneca's diabetes drug that it sells with
Bristol-Myers Squibb (NYSE: BMY), is off to a
slow start. The market is huge, but there's plenty of
well-established players, such as
Merck 's (NYSE: MRK) Januvia, that the duo
has to bump up against.
AstraZeneca's pipeline took a hit this week, when the
company withdrew marketing applications for its lung-cancer
drug Zactima, after updated analysis suggested that the drug
didn't help improve survival.
That leaves the potential for the next blockbuster on the
shoulders of blood thinner Brilinta. The marketing
application was recently submitted in the EU, and AstraZeneca
expects to file a New Drug Application with the Food and Drug
Administration this quarter. Â Brilinta fared
betterthan
sanofi-aventis ' (NYSE: SNY) and
Bristol-Myers' Plavix in a clinical trial, but that's not a
guarantee of success;
Eli Lilly (NYSE: LLY) and Daiichi Sankyo's
Effient also proved better than Plavix in the clinic, but
it's off to a relatively slow start.
It's kind of hard to get excited about AstraZeneca knowing
it'll face increasing generic competition with a pipeline
that's rather lackluster. It's probably worth
keeping an eye on, but it doesn't look cheap enough to
buy at this point. Let other investors enjoy the one-time
gains while you and I think a little more
long-term.
This article was originally published as
Of One-Time Gains and Pipelineson
Fool.com
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