AstraZeneca reports 18.4 percent profit decline

British drugmaker AstraZeneca said Thursday that its profit declined 18.4 percent in the third quarter of 2013 compared with the same period in 2012.

AstraZeneca is based in London and has facilities in Wilmington and Newark, Del. The company has cut jobs worldwide and in Delaware in recent months but there was no mention of new layoffs in the report issued Thursday morning before the London Stock Exchange opened.

A link to the press release, with the numbers, is here. The company has conference calls with reporters and analysts scheduled for later Thursday.

The company had predicted declines in revenue and profit because generic competitors were taking market share in key drugs.

One worrisome aspect is that AstraZeneca relies heavily on the revenue from the cholesterol medicine Crestor, and worldwide sales declined 9 percent in the first nine months of 2013. The drop was partially attributable to the start of generic competition in Canada and Australia. Still, Crestor had $4.159 billion in sales in the first nine months and the second-best selling drug was Atacand at $477 million.

AstraZeneca's revenue declined from $6.682 billion in the third quarter of the 2012 to $6.25 billion in the same period of 2013, a drop of 6 percent. The quarterly profit fell from $1.519 billion in 2012 to $1.24 billion in 2013.

“We continue to focus on the strategic priorities of returning to growth and achieving scientific leadership, and this is reflected in continued investment in our growth platforms and our pipeline," Chief Executive Officer Pascal Soriot said in a statement. "I am pleased with the progress we are making, particularly

on the pipeline, with three regulatory filings, three Phase III starts and four business development transactions since our last update. As expected, our financial performance this year reflects the ongoing impact from the loss of exclusivity for several key brands.”

Meanwhile, AstraZeneca announced that Marc Dunoyer was appointed chief financial officer and will join the company board as an executive director, starting Friday. Dunoyer, who previously worked at GlaxoSmithKline, succeeds Simon Lowth. Lowth had served as interim CEO before Soriot was hired, but he was expected to leave after Soriot was chosen. Lowth is headed for BG Group Plc, which is a UK-based natural gas company.

Despite cutbacks, AstraZeneca said it spent a bit more in the third quarter this year than in 2012, which might prompt further decline in profit, noted Bernstein Research analyst Tim Anderson.

In a note to clients after the earnings report was released, Anderson wrote that AstraZeneca (AZN), "is clearly the lowest expectation name in our coverage universe of 9 U.S. and European stocks and its valuation reflects this. This is consensus, and is the result of two issues: multiple large patent expirations over the next several years; and a thin late-stage pipeline in a company that has no great R&D track record. The stock seems to be at or near the bottom, but as the dust settles, investors have slowly been coming back to evaluate whether there are any hidden fundamental positives that could turn the stock around. At present, it remains difficult to point to any single source of unappreciated fundamentals, but at least the hiring of Pascal Soriot presumably rules out AZN doing any really bad, low-quality M&A deals. Some of the recent small deals AZN has done fill strategic gaps in AZN’s existing therapeutic areas, but they are far from representing 'high science.' "