AstraZeneca Named 2019 Best Pharmaceutical Company by BioPharma Dive

Recently, the foreign biopharmaceutical website BioPharma Dive launched its annual "Best of" series, in which AstraZeneca was named the 2019 Pharmaceutical Company of the Year. The site also announced the Biotech Company of the Year (Galapagos), CEO of the Year (Josh Bilenker, Loxo Oncology), Deal of the Year (Bristol-Myers Squibb’s $74 billion acquisition of Celgene), Disruptor of the Year (the Federal Trade Commission), Best New Drug Launch of the Year (Novartis’ Zolgensma), and Best Clinical Data of the Year (Aducanumab’s “comeback from the dead”).

After years of downturn, AstraZeneca has finally entered its moment in the spotlight; 2019 can be considered a banner year for AstraZeneca, with good news coming in succession.

On December 10, according to the National Medical Products Administration (NMPA) website, AstraZeneca’s (AZN.US) PD-L1 monoclonal antibody has completed the approval process, indicating that this drug is poised to become China’s first PD-L1 antibody medication.

On November 21, AstraZeneca (AZN.US) received FDA approval for a new indication of Calquence (acalabrutinib) for the treatment of adult patients with chronic lymphocytic leukemia (CLL)/small lymphocytic leukemia (SLL), including both treatment-naïve and relapsed patients. With the expansion of the eligible patient population, the market potential is expected to grow significantly, positioning AstraZeneca to reach its next strategic milestone.

So, how has AstraZeneca stood out among so many pharmaceutical giants? Here is the corresponding analysis:

Before reviewing AstraZeneca’s achievements and standing in 2019, let us first turn back the clock to 2012, the year Pascal Soriot assumed the role of Chief Executive Officer.

That year, this British pharmaceutical company remained heavily reliant on its portfolio of medicines in gastroenterology, neuroscience, respiratory diseases, and cardiovascular medicine, with many of its drugs facing declining sales.

By 2019, AstraZeneca’s oncology business, led by the three anticancer drugs Tagrisso, Imfinzi, and Lynparza, began to flourish comprehensively, with sales approaching the peak sales of its powerful cholesterol-lowering statin drug, Crestor, exceeding $6 billion.

In 2019, five of AstraZeneca’s seven blockbuster drugs were surging ahead, whereas in 2012, five of the seven were in decline. Compared to the same period in 2018, revenue for the first nine months of this year increased by $2.2 billion. AstraZeneca now has ample reason to take pride in its sales growth.

With its impressive performance, AstraZeneca has also won new supporters on Wall Street.

Tim Anderson, an analyst at Wolfe Research, described AstraZeneca as the “best long-term grower” among pharmaceutical companies and predicted that its revenue growth momentum would “continue through 2028.” Andrew Berens, an analyst at SVB Leerink, only began covering the British pharmaceutical company in late November and now regards AstraZeneca as “one of the stronger cancer drug manufacturers.”

This may also explain why AstraZeneca’s stock price has risen 30% this year, compared with an average increase of 6% for large pharmaceutical companies, and why Soriot was named by Harvard Business Review as one of only two biopharmaceutical executives among the world’s 100 best-performing CEOs.

If there are any other factors, they are: focusing on oncology business, concentrating on the product pipeline and key investment portfolio, and placing greater emphasis on the strategy for the Chinese market.

AstraZeneca’s lung cancer drug Tagrisso surpassed Symbicort earlier this year to become the company’s top-selling product of 2019, further solidifying its position within AstraZeneca’s portfolio. Although Tagrisso’s peak sales remain well below those of Crestor, the drug has the advantage of being the preferred treatment for targeted lung cancer indications. Compared with Crestor, Tagrisso requires significantly fewer sales and marketing resources, whereas Crestor faced intense competition from Pfizer’s cardiovascular drug Lipitor.

Meanwhile, Lynparza has become the premier therapy for diseases such as ovarian and breast cancer. Although AstraZeneca temporarily shelved the drug following a clinical failure in 2011, its subsequent resurgence quickly delivered substantial returns to the company. Recently, Lynparza has been the focal point of AstraZeneca’s collaboration with Merck, a partnership that secured AstraZeneca a $1.6 billion upfront payment last year.

Berens wrote in the November 22 launch memo, “By 2028, we expect this business area to achieve an annual growth rate exceeding 10%.”

AstraZeneca has now narrowed its commercial and R&D operations primarily to three core therapeutic areas: oncology; respiratory, cardiovascular, renal, and metabolic diseases. Within this scope, AstraZeneca’s product pipeline is also skewed toward cancer, with 97 of its 164 clinical research projects focused on this area.

According to statistical data compiled by the investment bank Cowen, AstraZeneca ranks among the top three in terms of the number of drug candidates and therapies recently submitted to regulatory authorities, compared with other large pharmaceutical companies. Meanwhile, its projected growth from 2018 to 2024 leads all pharmaceutical companies.

AstraZeneca sold off stakes in formerly award-winning brands such as Seroquel and Nexium to raise capital and focus on brands with greater growth potential. This strategy required investors to endure years of declining revenue while maintaining confidence in CEO Pascal Soriot’s promise to “restore growth.” However, the turning point came in 2018, when AstraZeneca achieved revenue growth for the first time in three years.

Soriot remarked earlier this year while commenting on the company’s 2018 performance, “Our sales declined for a longer period than during my entire tenure at AstraZeneca.” “We are now experiencing growth for the first time, and we anticipate a period of sustainable growth in the future.”

AstraZeneca also places great importance on the Chinese market, maintaining its own commercial and research operations in China, with its research business continuing to expand. AstraZeneca highly values collaborations with local companies.

In the first nine months of 2019, AstraZeneca’s sales in China reached $3.7 billion, accounting for 61% of its emerging market sales and 21% of its total sales, representing a year-on-year increase of more than one-third compared to the same period in 2018.

Nevertheless, a lingering question remains regarding AstraZeneca: whether it can achieve annual sales of $40 billion by 2023, the target promised by Soriot when he rejected Pfizer’s 2014 acquisition offer. Anderson forecasts AstraZeneca’s 2023 annual sales at $34 billion, while Cowen projects $37 billion.

The $40 billion commitment was predicated on the assumption that its three blockbuster oncology drugs would still succeed despite a high risk of clinical failure. However, five years on, many of those bets have paid off.