AstraZeneca (LON:AZN) (ST:AZN) shares fell more than 3% Tuesday after the drugmaker missed first-quarter revenue expectations, with underperformance in key cancer and respiratory drugs offsetting a stronger-than-expected profit result.
The British-Swedish company reported core earnings per share of $2.49, up 21% from a year earlier and 10% ahead of analyst estimates.
Total revenue rose 7% to $13.59 billion, or 10% at constant exchange rates, but missed consensus expectations by about 2%.
Jefferies analysts cited weaker product sales, particularly in Soliris and key oncology therapies, as the main reason for the miss.
The revenue shortfall was attributed to biosimilar pressure in Europe, emerging market order timing, and U.S. Medicare Part D changes that affected sales of Tagrisso, Calquence and Truqap.
Legacy respiratory drugs Symbicort and Pulmicort also underperformed. Alliance and collaboration revenue helped narrow the gap.
Still, core operating profit rose 12% to $4.80 billion, with gross margin improving to 84% and operating margin expanding to 35%. Lower selling and administrative costs and a favorable tax rate contributed to the earnings beat.
The company maintained its full-year guidance, expecting high single-digit revenue growth and low double-digit core EPS growth at constant exchange rates. Foreign exchange is expected to have a low single-digit adverse impact.
“Our strong growth momentum has continued into 2025, and we have now entered an unprecedented catalyst-rich period for our company,” chief executive Pascal Soriot said in a statement. He pointed to five positive Phase III trial readouts during the quarter and reiterated AstraZeneca’s target of $80 billion in annual revenue by 2030.
Among its strongest performers, Enhertu posted 34% growth, driven by expanded use in breast and gastric cancers. Tezspire and Ultomiris also recorded strong gains. However, revenue from rare disease treatments overall was flat at constant exchange rates.
The company also provided an update on regulatory matters in China. Authorities concluded that AstraZeneca (NASDAQ:AZN) did not gain any illegal advantage from an investigation into personal information.
However, a separate issue involving unpaid import taxes could result in a fine of up to five times the $1.6 million at stake.
Separately, AstraZeneca discontinued a Phase III trial of Truqap in metastatic prostate cancer after interim analysis showed the drug was unlikely to meet its endpoints.
