AstraZeneca profits fall despite Covid sales boost

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The pharmaceuticals giant said it had slid from a pre-tax profit of £2.9billion for 2020 due to its research and development costs skyrocketing 62 percent to £7.1billion.

Its higher R&D costs reflected its investment in the coronavirus vaccine it developed with the University of Oxford, as well as Evusheld, its new Covid antibody cocktail.

Its administrative and operating expenses also soared 35 per cent to £11.2billion. This was due to restructuring charges, writing down the value of assets it acquired in last year’s £29billion takeover of rare diseases group Alexion, discontinuing research projects and severance pay-offs.

AstraZeneca’s chief executive Pascal Soriot was bullish despite the news, saying revenues had shot up 40.6 percent to £27.5billion, thanks to five of its 11 blockbuster drugs breaking sales records.

And the firm plans to increase its dividend by 7.3p to 212.8 per share going forward. That would be worth £3.3billion to shareholders.

Soriot said: “The positive news from our pipeline, including approvals for Evusheld and Tezspire, supports the outlook for 2022. This, along with the transformative acquisition of Alexion, means we are confident in our long term growth and profitability.”

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AstraZeneca made just over £3billion of sales of its Covid vaccine last year. Originally sold at cost, it is now mildly profitable for the company.

Hargreaves Lansdown equity analyst Laura Hoy warned the firm and investors should be cautious.

She said: “There’s a lot riding on the successful integration of Alexion and growth in AstraZeneca’s newly approved drugs like Evusheld.”

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