ASTRAZENECA - Tremendous pressure - Messiah to be found
AZN reported its 4Q-2102 financial results, revenue declined by 15% while core EPS was up by 1% driven by one time tax benefits and lower operating costs. For 2013, the company has guided mid to high single digit decline in revenue, while core EPS should decline faster than revenue due to higher operating costs. We are forecasting core EPS to decline by 25 percent in 2013. We foresee following three events as most crucial for AZN over the next two years 1) CV outcome data from SAVOR-TIMI study on Ongylza – A positive outcome ahead of competition, could help Onglyza gain traction in the DPP-IV class. CV outcome data on competing DPP-IV drugs would be available by 2014 /2015. 2) A positive outcome from PEGASUS study exploring Brilinta in secondary prevention of ACS could help Brilinta become a mega blockbuster opportunity. 3) Impact of Outcome data from IMPROVE-IT Study on Crestor We see a potential surprise in store for AZN shareholders, in case the IMPROVE-IT study shows negative data i.e. Vytorin turns up inferior when compared to Zocor in ACS patients. Crestor which directly competes with Vytorin should be able to take some benefit and grab Vytorin market share (~ 4 percent now).