ii view: AstraZeneca profits receive cancer drug boost

Second-quarter results to 30 June

• Currency adjusted revenue up 6% to $15.38 billion (£11.5 billion)
• Currency adjusted core earnings per share (EPS) up 18% to $2.63
• Interim dividend up 3 US cents to $1.06 per share (79.5p)

Guidance:

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

Chief executive Pascal Soriot said:

"In the first half we saw strong performance and continued pipeline delivery, including six key positive Phase III programmes and eight first approvals in major markets, including in the US for Baxfendy, our first-in-class medicine for hypertension.

“We continue to invest at pace in our transformative technologies, and in our commercial execution to bring our innovative medicines to patients around the globe and drive growth beyond 2030."

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ii round-up:

AstraZeneca (LSE:AZN) today detailed ongoing growth in cancer drug sales, with the UK headquartered drug maker maintaining expectations for growth in full year sales and profits.

Second-quarter cancer drug sales up 15% to $7.33 billion drove overall sales 6% higher to $15.38 billion. Core earnings up 18% to $2.63 per share marginally beat City forecasts, but matched estimates when adjusted for the lower-than-expected tax rate.

Shares in the FTSE 100's second-largest company rose 1.5% in UK trading having come into these latest results up by close to a fifth over the last year. That’s similar to the FTSE 100 index. Rival GSK (LSE:GSK) has gained just over a third during that time.  

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

Alongside the results, Astra flagged promising trial results for an experimental treatment of gastric cancers, as well as a disappointment for its Ultomiris medicine in trials for in a rare blood disorder.

The Cambridge headquartered Astra pointed to more than 20 high-value trial readouts due over the next 18 months.

An interim dividend up 3 cents to $1.06 per share (79.5p) is payable to eligible shareholders on 8 September. Astra continues to expect a total full-year payment of $3.30 per share, a potential increase from last year’s $3.20.

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

Third-quarter results are scheduled for 30 October.

ii view:

Formed from a merger in 1999, AstraZeneca today employs around 96,000 people with operations in over 100 countries. Oncology products generated most sales during the first half of 2026 at 46%. That was followed by CVRM at 20%, Respiratory & Immunology (R&I) treatments and Rare disease medicines both at 16% each, with other medicines the balance of 2%.

Geographically, the US made most sales during the half-year at 42%. Europe followed at 22%, with China at 11%, emerging markets 16%, 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 industry, including litigation and government investigations. A forecast dividend yield of around 2% is less than rival GSK at around 3.6%, while acquisitions such as its previous $1.05 billion purchase of Amolyt Pharma, a biotech focused on developing treatments for rare endocrine diseases, are not without risk.

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To the upside, cancer treatment sales remain robust, accounting for 48% of total revenues during this latest quarter. A pricing agreement with the government of its core US market was previously agreed. In early 2026, Astra announced a $15 billion investment plan into China to help expand its capabilities in discovering, developing and making medicines, while geographic diversity includes 16% of sales going to the emerging markets.  

In all, Astra's confidence in achieving $80 billion of sales by 2030 (2025: $58.7 billion) is a relief, given fears the target would be threatened by the failure of a late-stage clinical trial for a major heart condition earlier this month. Astra shares had fallen sharply in response. A consensus fair value price target above £155 per share also gives grounds for optimism.

Positives:

• Strength of cancer sales
• AI now assisting with 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