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Astra kicked-off 2022 on a good note, with solid growth in Farxiga and higher COVID-19 vaccine sales, off-setting weaknesses in lynchpin oncology and rare diseases. Although vaccine-driven top-line tailwinds are expected to dissipate soon, this is expected to be offset by a recovery in the core areas. In Q1, profitability again came under pressure but improved sequentially, and should improve further as the ‘young’ portfolio rolls over. Overall, decent results and our positive recommendation on
Companies: AstraZeneca PLC
Astra finished 2021 on a strong note, driven by a solid contribution from oncology, diabetes drug Farxiga, the Alexion acquisition and COVID-19 vaccine sales. Although, profitability has again come under pressure, it isn’t a major worry, and should recover as its ‘young’ portfolio matures over time. Although, the recent clamp-down on Chinese entities/drugs by the US is worrisome, and should be watched closely, given Astra’s sizeable Chinese exposure. Overall, these are decent results and our pos
After witnessing an impressive run in 2021, Astra’s share has come under pressure in recent months. While this was partly driven by market-wide correction due to the fast-spreading Omicron variant and profitability concerns after the Q3 results, the firm remains on course to invest in promising areas. Hence, sector-leading sales growth and material medium-term earnings growth remain an unchanged scenario. As a result, our positive stock recommendation is reinforced.
In Q2, Astra reported strong sales growth momentum, (again) driven by a strong showing in oncology, diabetes drug Farxiga and COVID-19 vaccine sales. Although there were some issues in R&I and CVRM. More importantly, at cost vaccine sales and mandatory VBP discounts in China weighed on profitability. While the profitability strain can sustain in H2 as well, one should find confidence from the robust potential of core pharma offerings and the addition of high-growth and excellent-margin Alexion,
Astra kicked-off 2021 on a promising note, from both a sales and profitability perspective. Besides a healthy (though somewhat slower) performance for the lynchpin oncology portfolio, the strong growth in Farxiga (diabetes drug) was comforting. While the near term for the UK pharma giant could continue being hampered by the COVID-19 vaccine and Alexion deal terms-related uncertainties, a robust outlook for the core pharma business is encouraging and renders apt support to the stock recommendatio
Companies: AstraZeneca PLC (AZN:LON)Futura Medical plc (FUM:LON)
Unlike peers, AstraZeneca finished the year on a high, both from a sales and profitability growth perspective. Robust performance by its all-important Oncology franchise was soothing, especially when the Swiss peers witnessed issues. While the group’s debt burden and Alexion plans again curtailed shareholders rewards, a robust 2021 outlook and promise on the pharma innovation side is encouraging. Overall, an attractive pharma proposition, provided that one withstands uncertainties with respect t
Looking Ahead At The Next Week
AstraZeneca has made a significant bet on Alexion (rare diseases major). Given this foray into a growing area, the deal should create value – via immediate earnings accretion plus $500m p.a. of synergies from the third year onwards. Although, considering Alexion’s track record, (some) miss on the top-line potential can’t be ruled out. Moreover, leverage build-up – to finance this acquisition and, hence, dividend limitations should unnerve Astra’s shareholders. Overall, this deal has longer-term
After Pfizer and Moderna, AstraZeneca-Oxford reported (preliminary) late-stage results for their COVID-19 vaccine candidate. Based on logistics and pricing, Astra’s vaccine has clear advantages.
However, with results for other (major) countries still awaited and considering past safety concerns, it is pre-mature to decide if Astra has won this race. Also, considering the firm’s ‘no-profit’ commitment as long as the pandemic is on, any major earnings uptick seems unlikely.
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Weekly round-up of AIM-listed healthcare news.
Venture Life Group, GENinCode, Kromek, Alliance Pharma, Polarean Imaging, Benchmark Holdings, Ondine Biomedical, Verici Dx, Faron Pharmaceuticals, Avacta Group, Abingdon Health, Open Orphan, Belluscura, Hutchmed (China), Oxford Biodynamics
Companies: ANIC RUA CREO GENI HEIQ IHC IXI IUG OPTI SBTX VAL VLG
Companies: Futura Medical plc
Full-year results were in line with the preliminary guidance issued in early 2022. Feraccru revenues in Europe increased with a 60% increase in volumes and the US commercialisation of Accrufer continues, with broader insurance coverage (100m lives covered). As with many small cap companies, access to growth capital is currently difficult; however, the group has raised a $10m loan from a major shareholder providing a cash runway till end-2022. Our assumption is that further funding comes from deb
Companies: Shield Therapeutics Plc
Companies: Warpaint London PLC
Trading continues to track ahead of expectations, which have been upgraded twice so far YTD. There is clear evidence the growth strategy is bearing fruit. Distribution gains are increasing brand reach both in the UK and overseas. This appears to be an ideal time for its on-trend value-for-money proposition to gain traction, potentially with counter-cyclical characteristics as consumers start trading down. After the recent pull-back, valuation is undemanding for a 3-yr EPS CAGR of 13% with risk p
Singer Capital Markets
OptiBiotix has reported final results for the year to December 2021, with revenues growing 45% to £2.2m and the EBITDA loss increasing to £1.0m, reflecting the increased investment in the business. Post-period end, OptiBiotix has continued to return value to shareholders through the successful spin-out and listing of its ProBiotix Health division. Future growth of the company is supported by commercial agreements with large partners and a substantial pipeline of opportunities through its 2nd gen
Companies: OptiBiotix Health PLC
Companies: ORPH STX TSTL
Belluscura has announced the launch of the next generation X-PLOR portable oxygen concentrator and expanded distribution through a D2C offering and partnership distribution plan for smaller DMEs.
Companies: Belluscura PLC
Dish of the day
Visum Technologies has joined the AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators).
No Leavers Today.
What’s cooking in the IPO kitchen?
Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Compan
Companies: VAST TSTL 7DIG AHT CMX JADE
Companies: Oxford BioDynamics PLC
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Tungsten Corp and Sensyne Health have both left AIM. Hibernia REIT has left the Main Market.
What’s cooking in the IPO kitchen?
Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June.
LifeSafe Holdings, a fi
Companies: SOLI REDX POS UFO GML PHC
An update from CVS this morning covering conclusion of the CMA process, a further acquisition and update on trading. The CMA investigation into the acquisition of Quality Pet Care (QPC) is now complete, thereby bringing to an end a 9 month process. As part of the undertaking, CVS yesterday completed the sale of QPC for cash proceeds of c.£9m, implying a c.£12m impairment. Whilst the CMA episode has clearly been a setback, it does not seem to have fundamentally impaired ongoing M&A ambitions give
Companies: CVS Group plc
The strong momentum from Q4-21 has continued into H1-22, with revenues expected to be up by more than 22% YoY. The outlook remains positive supported by strong industry demand and market share gains in the UK, where the group’s sustainability and affordability credentials are increasingly resonating. Whilst some macro pressures remain, these look to be manageable. We therefore make no change to our forecasts at this stage, but are highly encouraged by current trends and remain optimistic for the
Companies: Surgical Innovations Group plc
Companies: SourceBio International Plc
A positive AGM update confirms strong revenue growth has continued YTD and further margin improvement means management again expect EBITDA to be materially ahead of expectations. The business model is now settled, with additional distributors appointed in the US which should help drive further penetration into the Primary Care market there. China revenues were strong and with no sign yet of any slowdown, despite being cognisant of renewed lockdowns there. Gross margins have remained robust on po
Companies: Circassia Group PLC