AstraZeneca PLC

AstraZeneca PLC (LON: AZN) is a Cambridge, United Kingdom-based biopharmaceutical company and is involved in the development and commercialization of prescription medicines. Presently, the company is a member of the FTSE 100 index.

Recent News
On 3^rd December 2019, the company (AstraZeneca PLC) had agreed to sell the commercial rights to Seroquel and Seroquel in the United States and Canada to Cheplapharm Arzneimittel GmbH. Cheplapharm will make a $35 million of upfront payment to the company and might also make future sales-contingent payments of up to $6 million. Income arising from the future payments and upfront expects to be reported in the company's financial statements under the Other Operating Income & Expense head.

On 29^th November 2019,the company revealed that the United States FDA (Food and Drug Administration) had approved an sBLA (supplemental Biologics License Application) and also awarded Priority Review for the treatment of patients for Imfinzi.

Financial Highlights (Year-to-date and Q3 2019)

(Source: Company Website)

On 24th October 2019, the group announced its results for the third quarter and nine months ended September 30, 2019. The group reported the product sales surged by 13 per cent year on year for the nine months ended 30th September 2019 at US$17.315 billion. The third-quarter product sales stood at US$6.132 billion, up by 16 per cent year on year. This led to a year on year total revenue growth of 20 per cent in the Q3 FY2019 at US$6.406 billion and a 13 per cent year on year surge in the total revenue for the Year to date at US$17.720 billion.

The company reported earnings per share at US$0.79 for the year to date,based on a weighted-average number of shares of 1.297 billion, reflecting a decrease of 11 per cent year on year. The group has been able to achieve one new molecular entity approval in the trailing quarter.

Share Price Performance

Daily Chart as at December-04-19, before the market closed (Source: Thomson Reuters)

On 4th December 2019, AstraZeneca PLC shares were trading at GBX 7,228 at the time of writing before the market close (at 1:18 PM GMT), down by 1.45% against the previous day closing price. Stock's 52 weeks High and Low are GBX 8,227.88/GBX 5,312. The company's stock beta stood at 0.79, reflecting the lower volatility as compared to the benchmark index.

The shares of the company have delivered a positive return of 21.31 per cent in the past six months. On Year to Date basis, the company’s stock has given investors 23.09 per cent of a positive return.

Conclusion
Over the last four years, the net income after tax of the company has increased at a CAGR of 13.51 per cent while operating income has grown at a CAGR of 12.2 per cent, indicating a strong growth.

This above agreement with Cheplapharm will not impact the AstraZeneca’s financial guidance for the year 2019.In the third quarter of 2019, the group has demonstrated good operating-margin improvement, as its core operating profit also surged during the current year.

The core tax rate will be in the array of 20% - 22% in FY19.  Product Sales are now anticipated to surge by a low to mid-teens percentage. The company reiterates its Core EPS guidance will be in the range of $3.50-$3.70 over the full year.

In the financial year 2019, the cash performance is anticipated to consist of numerous payments relating to prior business development transactions and most of the value of these payments in the current year was resolved in the H1 FY2019.

Based on the above rationale, we have given a “Hold” recommendation at the current price of GBX 7,228 (as on 4^th December 2019, before the market close).

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