Isaac Hanson
As Covid-19 product sales dip, other profits remain healthy. Credit: CROCOTHERY / Shutterstock.com.
Each week, Pharmaceutical Technology’s journalists pick out insights from company filings that highlight sentiments in our sector. These filings signals are based on GlobalData’s analysis of earnings statements, call transcripts, investor presentations and sustainability reports. They tell us about key topics on the minds of business leaders and investors, and the themes driving a company’s activities.
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Companies Intelligence
AstraZeneca Plc
Takeda UK Ltd
Roche Group
Roche S.A.
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In the last week week, pharmaceutical giants including Takeda,
AstraZeneca
and Roche released their half-year earnings reports, and the numbers give cause for optimism. Covid-19 profits continue to diminish as demand for vaccines wanes, but sales growth in other product areas remains strong enough to compensate. This refocusing is reflected in the mentions of key industry themes within the filings of the three companies.
Continuing a trend from Q1, weakening Covid-19 sales are impacting profits, sometimes to the point of exclusion from growth figures. AstraZeneca notes in its
H1 report
that total revenue was up 4%, but that figure jumps to 16% excluding Covid-19 medications.
Takeda reported a similar situation, with core operating profit up 2.3% in actual foreign exchange, but down 2% at constant exchange rate, which it attributes in part to Covid-19 product sales. In
its Q1 earnings call
, CFO Costa Saroukos explained: “This decline reflects product mix due to generic entry and lower Covid-19 vaccine revenues and also continued investment in R&D and data”.
Roche Group’s core profit was in fact
down 6%
, driven predominantly by declining Covid-19 product sales, which fell by CHF 5bn ($5.75bn) in Q2. Despite this, base business sales grew by 8%, indicating long-term sustainability, especially as a large portion of this growth was coming from new medication.
Declining Covid-19 product sales were inevitable as the global vaccination rate continues to increase and governmental funding for prevention tapers off. The exceptional profits created during the pandemic provided big pharma companies with healthy cash reserves, and the return to normal operation appears to be going smoothly.
Another indicator of a healthy market is the mass investment in artificial intelligence (AI) that many of these companies are undertaking. Of particular interest is Roche’s in-house language model that functions similarly to ChatGPT announced in early 2022.