Drug giant AstraZeneca on Oct. 28 said third-quarter net profits tumbled on the back of competition from generic drugmakers, restructuring costs and massive legal charges.
The group said that profits after tax sank in the three months to September despite a strong performance in emerging markets and sales of key drugs such as cholesterol treatment Crestor.
The group said net profits sank 27% to $1.55 billion(1.13 billion euros) in the three months to September, compared with $2.12 billion in third quarter 2009. Revenues fell $7.9 billion in the reporting period from $8.2 billion last time around.
"We remain firmly on track to achieve our full year financial targets," CEO David Brennan said. "The third quarter performance featured double-digit revenue growth in emerging markets. Revenue also increased in western Europe and established (markets in the) rest of world.
During the third quarter, Britain's second-biggest drugmaker was hit by legal charges of $473 million related to ongoing product liability litigation for the anti-psychotic drug Seroquel in the United States. Earlier this year, meanwhile, the group agreed to pay a $520 million fine to settle allegations it illegally marketed Seroquel for unapproved uses. The firm's U.S. division agreed to the fine for marketing Seroquel for so-called "off-label" uses not included in the drug's approved product label.
U.S. authorities contended that AstraZeneca illegally marketed Seroquel for uses never approved by the Food and Drug Administration such as aggression, Alzheimer's disease, anger management, anxiety, attention deficit hyperactivity disorder, bipolar maintenance, dementia, depression, mood disorder, post-traumatic stress disorder, and sleeplessness.
By doing so, the pharmaceutical group received government insurance payments that U.S. officials said were fraudulent.
"As expected, the impact of generic competition on several products and the absence of pandemic flu vaccine revenue led to a challenging quarter in the U.S." Sales in the United States were adversely affected by generic competition for breast cancer treatment Arimidex, asthma drug Pulmicort Respules and high blood pressure drug Toprol-XL.
The group's results were boosted in the third quarter of 2009 by sales of its H1N1 pandemic influenza vaccine.
AstraZeneca faces a steep drop in sales over coming years. Seven of its drugs, including three bestsellers, face generic competition by 2014 -- a higher ratio than its major European competitors.
Copyright Agence France-Presse, 2010