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How Crestor Weakened AstraZeneca’s CVMD Segment in 2Q16

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Aug. 24 2016, Updated 7:04 a.m. ET

Cardiovascular and metabolic disease segment

As we’ve already seen, the cardiovascular and metabolic disease (or CVMD) segment is AstraZeneca’s (AZN) largest revenue contributor. The segment contributed nearly 38.7% of total revenues in 2Q16 following a strong performance by Onglyza, Brilinta, Bydureon, and Farxiga. It was partially offset by lower sales of Crestor, Byetta, Alakand, and other products.

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Crestor

Crestor, which is used to reduce cholesterol and triglycerides in the blood, contributed ~16.5% of AstraZeneca’s total 2Q16 revenues. At constant exchange rates, Crestor revenues decreased by 29% at $926 million during 2Q16. In US markets, revenues declined by 52% to $368 million following the patent expiration of the drug in May 2016. European markets reported a 1% decline in sales at $226 million due to competition from generic statins. Sales in emerging markets increased 5% at constant exchange rates during 2Q16.

Competitors for Crestor are Lipitor from Pfizer (PFE), Zocor from Merck & Co. (MRK), Advicor from Abbott Laboratories (ABT), and Pravachol from Bristol-Myers Squibb (BMY).

Brilinta/Brilique

Brilinta/Brilique, a growth platform product, is used to prevent blood clots in the heart and blood vessels. The FDA (U.S. Food and Drug Administration) approved a new 60 mg (milligram) dose for Brilinta in the second half of 2015. The drug’s 2Q16 revenues reported an operational increase of 51% to $214 million, with an increase of 62% in US sales at $89 million, a ~16% increase in European sales, and a ~104% increase in emerging market sales at constant exchange rates.

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Onglyza

Onglyza, a diabetes product to control blood sugar levels, reported a 7% decrease in revenues at constant exchange rates. It was driven by a 22% decline in sales in US markets, partially offset by a 12% increase in sales in emerging markets and a 14% increase in European markets.

Other CVMD products

Other products in the CVMD segment include Farxiga/Forxiga, Bydureon, Byetta, and Seloken. Revenues in 2Q16 for Farxiga/Forxiga increased by 65% due to higher demand in all markets, including the United States, Europe, and emerging markets.

Bydureon revenues increased by 11%, while Byetta sales declined by 6% during 2Q16. The company is making constant efforts to expand its presence in diabetes products in Europe with the help of Bydureon.

Investors can consider ETFs such as the iShares Global Healthcare (IXJ), which holds ~2.0% of its total assets in AstraZeneca.

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