AstraZeneca reported Thursday that third-quarter net income jumped to $3.5 billion from $1.6 billion in the year-ago period, topping analysts' expectations of $3.2 billion, as the company recorded gains from the $1.8-billion divestment of its Astra Tech dental unit.

Overall sales in the quarter rose 4 percent to $8.2 billion, led by "strong revenue growth" for Crestor, Seroquel and Symbicort, beating analyst estimates of $8.1 billion.

CEO David Brennan remarked that the company "delivered a third quarter revenue…performance in line with our expectations, against the backdrop of anticipated generic competition and government price interventions," which reduced sales by more than $350 million.

"We have also increased our Core EPS target for the full year," he added, with the drugmaker now predicting earnings of between $7.20 per share and $7.40 per share, up from an earlier estimate of $7.05 per share to $7.35 per share.

"This is basically bang in line with what we were hoping for, with revenue and core operating profit at expected levels," commented Charles Stanley analyst James Dawson. He added that "it is interesting to note that AstraZeneca report a clear increase in research and development relative to sales," with R&D spending rising 17 percent year-over-year to $1.3 billion in the quarter, noting that "this provides hope for future revenue."

In the three-month period, sales of Crestor jumped 21 percent to $1.7 billion, which AstraZeneca said reflected a 20-percent increase in US sales to $753 million.

"Crestor was a beat based on a price increase," noted Nomura analyst Amit Roy. Pfizer's Lipitor will face generic competition in the fourth quarter, which Roy explained "is an excuse for statin makers to jack up the prices."

Quarterly revenue from Seroquel products rose 4 percent on a constant exchange rate basis to $1.4 billion, while sales of Symbicort jumped 18 percent to $755 million. The company noted that revenue from Nexium fell 12 percent to $1.1 billion, as sales of the product fell 16 percent in the US to $570 million, due in part to healthcare reform, and dropped 42 percent in Western Europe to $163 million, largely due to generic launches.

Arimidex was also negatively affected by generic competition, with sales of the cancer drug dropping 38 percent to $176 million. Sales of the product in the US plunged 81 percent in the third quarter to $8 million, and fell 59 percent in Western Europe to $54 million. However, Goldman Sachs analysts noted that sales of "most key products were broadly in line with expectations."

AstraZeneca noted that flat US sales of $3.2 billion and a 4-percent drop in revenue in Western Europe to $2.1 billion were partially offset by growth in emerging markets, where sales increased 11 percent to $1.5 billion.

The company added that it has repurchased stock worth $3.8 billion so far this year as part of its estimated $5-billion share buyback scheme for 2011, which was expanded in July.

On Wednesday, the FDA confirmed that it had extended the review of AstraZeneca and partner Bristol-Myers Squibb's dapagliflozin, with a decision on whether to approve the drug for adults with type 2 diabetes now expected by January 28.

AstraZeneca said that the companies "are submitting data from recently completed and ongoing Phase III clinical trials" in response to the agency's request for additional information. Savvas Neophytou of Panmure Gordon & Co. commented that "dapagliflozin has had an extension to its review date by the FDA.

For a drug that the market assumed was dead in the water...in July, we believe this is positive news."
Ref: BBC News, Bloomberg, The Telegraph, MarketWatch, Yahoo!News, IBTimes, Financial Times, The Wall Street Journal, FOX Business, AstraZeneca)