ii view: AstraZeneca beats forecasts as cancer drug sales surge

First-quarter results to 31 March

• Currency adjusted revenue up 8% to $15.28 billion (£11.3 billion)
• Currency adjusted core earnings per share (EPS) up 5% to $2.58

Guidance:

• Continues to expect currency adjusted revenues to increase in 2026 by a mid-to-high single-digit percentage
• Continues to expect core EPS to rise by low double-digit percentage in 2026

Chief executive Pascal Soriot said:

“We delivered strong growth in Q1 2026, with Total Revenue above $15 billion, demonstrating our consistent commercial execution. 

“We continue to invest in our commercial capabilities as we prepare for multiple launches, look forward to further readouts anticipated this year, and remain on track to achieve our ambition for 2030 and beyond.”

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ii round-up:

AstraZeneca (LSE:AZN) today detailed ongoing growth in cancer drug sales, with earnings per share exceeding City forecasts. 

Currency adjusted sales for the first quarter to late March rose 8% to $15.5 billion (£11.3 billion), driving core earnings on the same basis up 5% to $2.58 per share. Analysts had forecast earnings of $2.55 per share. Cancer, or oncology related sales climbed 16% year-over-year to $6.79 billion.

Shares in the company, currently the second-largest in the FTSE 100, fell 1% in early UK trading having come into these latest results up by close to a third over the last year. The FTSE 100 index is up by just over a fifth in that time. Rival GSK (LSE:GSK) has gained by more than two-fifths. 

AstraZeneca’s medicines focus on areas including oncology; Cardiovascular, Renal and Metabolic (CVRM) illnesses; and other arenas including rare diseases.

Drug development successes saw positive readouts for four high-value Phase III programmes during the period. A total of 14 treatment approvals across major regions were also received.

Trials for Astra’s Datroway lung cancer treatments were bumped into 2027 compared to prior hopes for the second half of this year.

Management maintained full year 2026 forecasts, with currency adjusted sales expected to grow by a mid-to-high single digit percentage and earnings rising by a low-double digit percentage.  

Broker Morgan Stanley reiterated its ‘overweight’ stance on AstraZeneca shares post the results, again flagging the company as a ‘top pick.’

Second-quarter results are scheduled for 27 July. 

ii view:

Formed via a UK and Swedish company merger in 1999, AstraZeneca today employs around 96,000 people with operations in over 100 countries. Cancer products generated most sales in 2025 at 44%. That was followed by CVRM sales at 22%, rare disease sales at 16%, Respiratory & Immunology (R&I) treatments 15%, and other medicines the balance of 3%.

Geographically, the US made most sales in 2025 at 43%. Europe followed at 22%, with China at 11%, emerging markets 15%, and other established markets the balance of 9%.  

For investors, stretched government finances globally generate pressure to reduce medicine prices. Legal proceedings are considered typical for the pharmaceutical business, including litigation and government investigations. A forecast price/earnings (PE) ratio matching the three-year average may suggest the shares are not obviously cheap, while Astra’s forecast dividend yield of around 1.8% is less than rival GSK at over 3%. 

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More favourably, cancer treatment sales remain robust, accounting for 45% of overall revenues during this latest quarter. A pricing agreement for its biggest market, the USA, generating 41% of current sales, was already agreed. A previous collaborative agreement with China’s CSPC Pharmaceuticals expands developmental opportunities in the weight management drug arena, while geographical diversity includes around 16% of sales going to the emerging markets.  

In all, and with AstraZeneca continuing to target annual revenues of $80 billion by 2030 compared with $58.7 billion in 2025, there looks to remain grounds for further investor optimism. 

Positives: 

• Ongoing drug development
• Collaborations adding to diversity of new drug development

Negatives:

• Involved in various legal proceedings considered typical to its business
• Currency movements can hinder

The average rating of stock market analysts:

Buy