AstraZeneca reports strong rise in full year earnings on swine flu and emerging markets

AstraZeneca reports strong rise in earnings

LONDON — Pharmaceutical company AstraZeneca PLC said Thursday it plans to ax 8,000 more jobs to cut costs as it reported a 26 percent jump in fourth quarter net profit to $1.56 billion.

Full-year net profit surged 23 percent to $7.54 billion after the drugmaker benefited from strong sales of its swine flu drug and saw off some challenges from generic rivals.

A good performance in emerging markets also helped boost revenue by 9 percent over the quarter to $8.95 billion, and by 4 percent over the year to $32.8 billion.

However, AstraZeneca acknowledged that the swine flu and generic lifts over the year provided an unexpected upside to its revenues and warned investors that the outlook for 2010 is tougher as some of its key products come off patent.

“If you throw in the uncertainty surrounding U.S. healthcare reform, it’s clear that 2010 is going to be a challenging year,” Chief Executive Officer David Brennan said on a conference call with reporters.

Shares in AstraZeneca dropped 3.3 percent 2,946.5 pence ($47.85) after the earnings report.

Brennan said that the company expected a percentage fall in revenue this year in the mid single digits on a constant currency basis.

Earnings per share for the current year was pegged at $5.75 to $6.15 — substantially lower than the $6.32 it reported for 2009.

Revenues in 2010 will come under pressure as key products such as child asthma medication Pulmicort, which made sales of $1.3 billion in 2009, and breast cancer treatment Arimidex, which made $1.92 billion, lose patent protection.

The company is also unlikely to book any profits from the two key peformers of 2009 — its H1N1 swine flu vaccine and Toprol-XL, which benefited from the withdrawal of two generic rivals.

Brennan said that the company was extending a cost-cutting program it launched in 2007, which has saved the company $1.6 billion annually at the end of 2009 — at a restructuring cost of $2.5 billion.

Extending the program out to 2014 will cost another $2 billion, with expected benefits of $1.9 billion a year by 2014, he said.

Some 10,400 jobs are expected to go over the next five years, 2,400 of which have already been announced by the company. Brennan said the company’s research & development division would account for net cuts of around 1,800.

The company, Britain’s second-largest drug maker behind GlaxoSmithKline PLC, also announced plans for a $1 billion share buyback this year.

(This version CORRECTS Corrects job loss figure to 8,000 in lede, sted of 800.)