AstraZeneca shaping up

July 26, 2001 Posted: 1159 GMT

LONDON (CNN) -- Drugmaker AstraZeneca on Thursday posted a rise in profits of 4 percent for the second quarter on the back of increased Nexium sales.

AstraZeneca (AZN), formed by the union of UK-based Zeneca Group with Sweden's Astra two years ago, said net profit for the quarter ended June 30 was $706 million (802 million) from $678 million a year ago.

Pretax profit before exceptional items was $1.02 billion, down on last year's $1.08 billion, in line with the company's forecast in April. Sales rose to $4.1 billion from $4 billion in the equivalent period in 2000.

Earnings per share came in at 40 U.S. cents, compared to the 37 cents of last year.

Chief Executive Tom McKillop said: "The successful launches of Nexium and Symbicort (asthma drugs) and the good progress with our strong pipeline [of new products], mark a promising start to the transformation of our portfolio and provide the platform for future growth."

AstraZeneca is under pressure to find a replacement for its popular Losec drug, which faces competition from cheaper generic drugs later this year.

Sales of Losec totaled $1.4 billion in the three months to June 30, up 3 percent on the same period a year ago, while Nexium registered sales of $46 million.

McKillop also said the company would sell its anti-cholesterol drug, Crestor, on its own rather than via a marketing partner. "I am confident that our decision to 'go it alone' with Crestor will deliver excellent value to shareholders," he said.

Shares in AstraZeneca rose 3.1 percent to 3,365 pence in midday London trade.

John Smith, head of strategy at Brown Shipley Investment Managers, said the figures were broadly in line with expectations.

He told Reuters: "Market sentiment is such that when something is in line, it's good, such is the negative sentiment of the market at the moment."

Rival GlaxoSmithKline (GSK), Europe's biggest drugmaker, on Tuesday said second-quarter profit rose 13 percent to 1 billion pounds ($1.4 billion) on increased demand for its drugs.

Swiss pharmaceutical firms Novartis and Roche report next month, but few analysts have been recommending shares in the two slow-growing companies.

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