AstraZeneca has raised its fiscal 2024 guidance for the second consecutive quarter, building on solid third-quarter results driven by strong demand for its cancer treatments. The update comes amid ongoing legal challenges in China, where the company is under investigation, but its financial performance remains resilient.
Strong Earnings and Growing Revenue
In its third-quarter report, AstraZeneca exceeded analyst expectations, posting core earnings per share (EPS) of $2.08 (€1.96) and total revenue of $13.57 billion (€12.77 billion). These results represent a year-on-year increase of 20% and 18%, respectively, at constant exchange rates (CER), showing improvement from the previous quarter’s 15% and 17% growth. Oncology continued to be a major driver of sales, with the division posting a 22% increase in revenue compared to the same period last year.
CEO Pascal Soriot expressed optimism about the company’s ongoing growth, noting: “We are highly encouraged by the broad-based momentum we are seeing across our company in 2024, with growth set to continue through 2025, providing a solid foundation for our 2030 ambitions.”
Despite the ongoing legal concerns in China, Soriot reiterated AstraZeneca’s commitment to the country: “We take the matters in China very seriously and, if requested, will fully cooperate with the authorities. We remain committed to delivering innovative, life-changing medicines to patients in China.”
In addition to its strong quarterly performance, AstraZeneca previously set a long-term revenue target of $80 billion (€73.8 billion) by 2030, citing significant growth opportunities from both its existing products and its late-stage pipeline.
Higher Growth Outlook for 2024
Based on its strong performance, AstraZeneca increased its guidance for 2024, raising its expectations for both revenue growth and core EPS to the high-teens percentage range, up from the mid-teens it had forecast in the previous quarter. Initially, the company had anticipated a more modest low double-digit to low-teens growth rate.
Legal Challenges in China
While AstraZeneca’s financials remain strong, concerns about the company’s legal situation in China have raised some uncertainties. On November 5, the company’s shares saw their largest drop since 2020 after reports surfaced that Leon Wang, AstraZeneca’s China President, was under investigation by Chinese authorities. This news heightened investor fears, contributing to a 25% decline in AstraZeneca’s stock price from its peak in early September.
The investigation reportedly involves allegations of misconduct, including illegal sales practices, smuggling of immunotherapy treatments, and insurance fraud, leading to concerns that these legal issues could have an ongoing impact on the company’s operations and stock performance.
In the third quarter, AstraZeneca’s sales in China grew by 15% to $1.67 billion (€1.57 billion), accounting for 12% of its total revenue. Although growth in China remained strong, it was slower than in other regions, with the U.S. and EU reporting growth rates of 23% and 22%, respectively.
AstraZeneca has clarified that it is not the subject of any formal investigation, but acknowledged that some current and former employees are under scrutiny. “As previously disclosed, the company is aware of a number of individual investigations by the Chinese authorities into current and former AstraZeneca employees,” the company said in a statement. “The investigations reportedly concern allegations of medical insurance fraud, illegal drug importation, and breaches of personal information. Leon Wang, AstraZeneca’s Executive Vice President for International and President of AstraZeneca China, has been detained. If requested, AstraZeneca will fully cooperate with the Chinese authorities.”
Despite the ongoing legal challenges, AstraZeneca remains focused on its global strategy and continues to position itself for growth, particularly in its oncology business, where it sees strong long-term potential.
