AstraZeneca Reports Strong H1 2020 Financial Results with 14% Growth in China Aligned with Global Trends

On July 30, British pharmaceutical giant AstraZeneca announced its financial results for the first half of 2020, reporting global revenue of $12.629 billion, a year-on-year increase of 14% (calculated at constant exchange rates, as applied below), primarily driven by the performance of new products in emerging markets and the oncology segment. Product sales revenue totaled $12.359 billion, representing a 13% year-on-year growth. In the first half of 2020, AstraZeneca’s oncology products generated $5.324 billion in revenue, up 31% year on year; cardiovascular, renal, and metabolism (CVRM) products brought in $2.265 billion, an 11% year-on-year increase; and respiratory and immunology products accounted for $2.676 billion, a 7% year-on-year rise. In the second quarter, AstraZeneca’s global revenue reached $6.0 billion, a 9% year-on-year increase. However, revenue from respiratory and immunology products declined by 8%, mainly due to the impact of the COVID-19 pandemic on the sales of Pulmicort Turbuhaler (budesonide) in China.

By specific product, the key growth drivers for the oncology portfolio include Tagrisso, a treatment for non-small cell lung cancer, with sales reaching $2.016 billion, a year-on-year increase of 45%; Imfinzi, a PD-L1 monoclonal antibody, with sales of $954 million, up 52%; and Lynparza, a treatment for ovarian cancer, with sales of $816 million, a year-on-year increase of 60%. Other contributors include Bosulif, a treatment for chronic leukemia, with sales of $195 million, and Enhertu, an antibody-drug conjugate developed in collaboration with Daiichi Sankyo, which generated $36 million in royalty income.

The primary drivers in the CVRM portfolio were the heart failure drug Farxiga, with sales of $848 million, a year-on-year increase of 21%, and the antiplatelet agent Brilinta, with sales of $845 million, a year-on-year increase of 17%. In the Respiratory and Immunology segment, Symbicort Turbuhaler, a treatment for chronic obstructive pulmonary disease (COPD), generated sales of $1.442 billion, a year-on-year increase of 26%; Fasenra, a treatment for eosinophilic asthma, recorded sales of $426 million, a year-on-year increase of 45%. Additionally, AstraZeneca announced that its SARS-CoV-2 vaccine, AZD1222, has entered Phase II/III clinical trials, recently completing the enrollment of 5,000 participants in Brazil, with preliminary results expected to be released in the second half of 2020.

By market segment, revenue from emerging markets increased by 15% year-on-year to $4.329 billion, of which revenue from the China market amounted to $2.659 billion, a 14% year-on-year increase. Revenue in the China market for the second quarter grew by 12% year-on-year, reaching $1.243 billion. Revenue from emerging markets excluding China totaled $1.671 billion, representing a 15% year-on-year growth. Revenue from the US market was $4.177 billion, while European market revenue rose by 20% to $2.447 billion. AstraZeneca’s 2020 performance guidance remains unchanged, with full-year growth projected to be in the high single-digit to low-to-mid double-digit percentage range.

China Market Performance

Growth in the Chinese market was primarily driven by sales of new products, which accounted for one-third of total revenue in this market. Lynparza (olaparib), Evrenzo (roxadustat), developed in collaboration with FibroGen, and the antidiabetic drug Forxiga (empagliflozin), which were included in the updated National Reimbursement Drug List, officially took effect on January 1, 2020.

The third round of China’s national volume-based procurement (VBP) will open bids on August 20, with four AstraZeneca products shortlisted. Although Pulmicort Turbuhaler was not included in the shortlist, questions were raised during the earnings conference call about the potential impact of VBP participation on revenue in the Chinese market. AstraZeneca CEO Pascal Soriot emphasized the importance of Breztri Aerosphere (budesonide, glycopyrronium, and formoterol), an asthma and chronic obstructive pulmonary disease (COPD) medication recently approved in China. He stated, “Historically, the treatment strategy for asthma in China has focused on managing acute exacerbations. We need to persuade physicians to shift their approach from treating exacerbations to maintenance therapy (to prevent exacerbations). As a result, drugs such as Symbicort Turbuhaler and, in particular, Breztri Aerosphere hold significant potential in China’s COPD and asthma markets.”

Figure 1: AstraZeneca's Revenue by Region, 2013–2019

Figure 2: AstraZeneca’s R&D Expenditure, 2006–2019

Figure 3: AstraZeneca's Employee Distribution by Region in 2019

Editor’s Note: In Q1 2020, AstraZeneca’s global revenue reached $6.35 billion, a year-on-year increase of 17%, compared to only a 9% growth in Q2. This indicates that the positive impact of the COVID-19 pandemic on most pharmaceutical companies observed in Q1 is gradually waning. The same trend is evident in the Chinese market: AstraZeneca’s growth rates were 28% and 17% in Q4 2019 and Q1 2020, respectively, but slowed to just 12% in Q2 2020, demonstrating that the COVID-19 outbreak has significantly affected the sales of Pulmicort Turbuhaler (budesonide) in China.