AstraZeneca Looks to Cancer, RSV Drugs for Growth as Covid-Vaccine Demand Wanes

Now the company is reducing production of its vaccine, while lining up successors to some blockbusters that have helped propel the company’s growth in recent years but are nearing the end of their patent protection.

“The vaccine and Evusheld were important in the last two years,” said

Ruud Dobber,

head of AstraZeneca’s biopharmaceuticals unit. “But there’s so much more.”

The good news for AstraZeneca is that company sales have been growing through the pandemic thanks to strong performances from established products like lung-cancer therapy Tagrisso and diabetes and cardiovascular drug Farxiga.

Excluding the vaccine, its 2021 revenue rose around 26% to $33.4 billion, making it one of the fastest-growing pharmaceutical companies by sales, according to Daniel Chancellor, an analyst at Citeline, a global pharmaceutical intelligence firm.

In addition, the company has two drugs, a breast-cancer treatment called Enhertu and the Beyfortus respiratory syncytial virus treatment, that analysts expect to be multibillion-dollar sellers.

“As the older drugs begin to tail off, can it replace revenues with new growth products? The Covid vaccine isn’t one of those,” said Mr. Chancellor.

The stakes are high because Farxiga, ovarian-cancer treatment Lynparza and heart pill Brilinta, which together made up $7.2 billion of AstraZeneca’s $37.4 billion in revenue last year, will begin to lose patent protection over the next five years, likely prompting competition that will cut into sales.

AstraZeneca, of Cambridge, England, is familiar with the pharmaceutical feast and famine cycle. When Chief Executive

Pascal Soriot

took the helm in 2012, the company faced what he called the steepest patent cliff in the industry, losing billions of dollars in sales from old blockbusters such as cholesterol-busting drug Crestor, psychiatric drug Seroquel and heartburn treatment Nexium.

Mr. Soriot invested heavily in research and deal making to rebuild the pipeline. In addition to Tagrisso and Farxiga, Lynparza and other cancer drugs Imfinzi and Calquence are among the big sellers currently driving strong growth.

Then the pandemic hit. Despite inexperience in vaccines, AstraZeneca raced with partners at the University of Oxford to roll out a Covid-19 vaccine called Vaxzevria.

The shot played a pivotal role in inoculating much of the world. The company and its partners delivered more than two billion doses in the first year of the global vaccine rollout, on a par with the Covid-19 vaccine from

Pfizer Inc.

and

BioNTech SE,

according to healthcare data company Airfinity.

Vaxzevria wasn’t approved in the U.S., however, and European governments later shunned it as a booster, preferring the mRNA based shots from Pfizer-BioNTech and

Moderna Inc.,

which were shown to spur higher antibody levels.

“Every regulatory authority that looked at the vaccine was fine with it,” said Adrian Hill, one of the Oxford scientists involved in developing the vaccine. “Where there was dramatic variability was among government advisers on vaccine policy.”

AstraZeneca said it effectively sold Vaxzevria at cost. So despite jostling for top position as the company’s bestseller in 2021 with sales of nearly $4 billion, it scarcely touched the bottom line.

The vaccine’s role at AstraZeneca is now dwindling. Most Covid-19 vaccine deliveries this year were linked to contracts it signed early on in the pandemic, and there is excess supply, according to the company.

The company’s Covid-19 drug Evusheld did produce a profit for the company, and notched about $914 million in sales in the first half of this year.

Enhertu, which AstraZeneca is developing with

Daiichi Sankyo Co.

, has been approved for use in the U.S. since 2019 to treat advanced breast cancers with high levels of a protein known as HER2 found on the surface of tumor cells, a group known as HER2-positive that has several drugs available.

In August, it was also approved in the U.S. to treat patients whose tumors have low levels of HER2, after a trial showed that it also shrank tumors and cut the risk of death in these patients. That marked a big scientific breakthrough for these patients, who are typically treated with classic chemotherapy. The researchers who presented the results at a cancer conference earlier this year received a rare standing ovation.

Enhertu, which generated $426 million in total revenue last year, could make some $6 billion in total annual sales by 2027,

Credit Suisse

estimated. Under its deal with Daiichi, AstraZeneca receives half the profits from all sales of Enhertu outside of Japan.

Enhertu has the approvals “to be one of the biggest medicines of all time,” said

Dave Fredrickson,

who leads AstraZeneca’s oncology business unit.

Beyfortus is an antibody drug aimed at protecting infants from RSV, a common virus that can sometimes cause serious illness, especially in babies and older adults.

The drug, which mimics the antibodies that would be naturally generated in response to RSV, aims to provide vaccine-like protection to babies. In a large clinical trial, babies who received a single shot of Beyfortus were 75% less likely to develop an infection from RSV that required medical attention than those who received a placebo.

Last month, an advisory panel for the European Medicines Agency endorsed Beyfortus, a step which typically leads to regulatory approval. AstraZeneca said it plans to submit the treatment to the U.S. Food and Drug Administration for review by the end of the year.

The drug would generate nearly $3 billion in revenue by 2025 for AstraZeneca and partner Sanofi SA, Citeline analysts estimated.

Write to Denise Roland at [email protected]