AstraZeneca Warns Of Tough Year Ahead

Published February 2, 2012 10:09AM (EST)

LONDON (AP) — Drug maker AstraZeneca PLC warned of a tough year ahead as it reported a 24 percent increase in 2011 profits.

The Anglo-Swedish company said Thursday its full-year profit was $10 billion, up from $8.1 billion a year earlier. The profit advance was helped heavily by a $1.5 billion gain from the sale of its dental subsidiary, Astra Tech.

The company said revenue this year will be hit by government interventions on prices, generic competition and the loss of exclusivity for Seroquel IR, a drug for the treatment of depression, and hypertension drug Atacand in global markets.

AstraZeneca shares opened 2 percent lower in London.

A more detailed look at the earnings shows that generics cut revenue by $2 billion in 2011 while price interventions cost another $1 billion.

Despite its concerns over the year ahead, AstraZeneca raised its full-year dividend by 10 percent to $2.80 a share10 percent, and announced a $4.5 billion share buyback program.

The company reported double-digit sales gains for cholesterol drug Crestor, Symbicort for asthma and Seroquel XR.

U.S. revenues were up 5 percent despite the negative impact of health care reform, while revenue in the rest of the world was down 3 percent, including a 15 percent slide in Europe.

"The results contained a boost from the announcement of a new restructuring program involving some 7,300 positions," said Savvas Neophytou, analyst at Panmure Gordon.

AstraZeneca said it would shortly begin consultations with affected employees.

By Salon Staff

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