AstraZeneca - $AZN.LN

What’s AstraZeneca Business Model?

AstraZeneca PLC operates as a holding company. The Company, through its subsidiaries, researches, manufactures, and sells pharmaceutical and medical products. AstraZeneca focuses its operations on eight therapeutic areas, including gastrointestinal, oncology, cardiovascular, respiratory, central nervous system, pain control, anaesthesia, and infection.

What AstraZeneca is doing in more details?

One of the world’s major pharmaceutical firms, AstraZeneca specializes in drugs for cardiovascular, metabolic, neurological, gastrointestinal, respiratory, oncology, and infection therapy area.

The firm’s biggest sellers include cholesterol reducer Crestor, cardiovascular drug Brilinta, acid reflux remedy Nexium, and Symbicort for asthma. AstraZeneca also markets drugs that aim to treat high cholesterol, diabetes, pain, viral diseases, and various cancers.

The company has more than 30 factories globally and R&D centers in the UK, US, Sweden, and China, and its products are sold in more than 100 countries.

Where AstraZeneca is Operating?

AstraZeneca operates as a single operating segment that researches, develops, manufactures, and commercializes biopharmaceuticals. Its research focuses on four therapy areas: Oncology; Cardiovascular, Renal & Metabolism; Respiratory & Immunology; and Other Medicines and COVID-19.

Oncology brings in more than 40% of total sales. Its major products include Faslodex for breast cancer and Zoladex for breast and prostate cancers.

The Cardiovascular, Renal, & Metabolism group is brings in over 25% of total sales. Its major products include Crestor for high cholesterol and Brilinta for the treatment of coronary syndromes and prevention of further coronary events.

Other drugs include Farxiga, Onglyza, Bydureon, and Byetta (for type-2 diabetes); Symlin (diabetes); Seloken/Toptol-XL and Atacand (hypertension, heart failure, and angina).

The Respiratory & Immunology unit brings in more than 20% of total sales, largely from the sales of asthma drug Symbicort (the company’s single biggest earner).

The Other Medicines and COVID-19 segment brings in about 10% of total sales produces drugs in the areas of autoimmunity, infection, neuroscience, and gastroenterology. Its leading drugs include acid reflux medication Nexium and schizophrenia treatment Seroquel.

AstraZeneca is working to defeat the COVID-19 pandemic by advancing and accelerating the development of potential medicines.

Where is the geographical reach of AstraZeneca?

Cambridge, UK-based AstraZeneca has operations in Europe, North America, Central America, South America, the Middle East, Africa, and the Asia/Pacific region. It manufactures products from more than 30 sites in more than 15 countries.

The company has R&D centers in the US, the UK, Sweden, Japan, and China.

The Americas is AstraZeneca’s most lucrative region, accounting for nearly 40% of sales. The Asia/Pacific region, Africa, and Australasia together represent more than 35% of sales, Continental Europe more than 15%, and the company’s native UK generate more than 5% of sales.

What is AstraZeneca’s Sales and Marketing Strategy?

AstraZeneca markets its products to physicians through sales and marketing teams who are active in more than 100 countries. It typically sells through local marketing companies, which it owns, as well as through distributors and local representative offices.

What is AstraZeneca Financial Performance?

Total Revenue for the year was up 9% (CER: 10%) to $26.6 million, comprising Product Sales of $25.9 million up 10% (CER: 11%) and Collaboration Revenue of $727 million; a decrease of 11% (CER: 11%).

The company’s profit increased by 156% to $3.1 billion in 2020. The increase was primarily due to lower selling, general and administrative costs, and research and development expense.

Cash held by the company at the end of 2020 increased by $2.3 billion to $7.5 billion from $5.2 billion in the prior year. Cash provided by operations was $4.8 billion, while cash used for investing and financing activities were $285 million and $2.2 billion, respectively.

AstraZeneca’s main cash uses in 2020 were capital expenditures and paid dividends.

What is AstraZeneca Future Strategy?

AstraZeneca’s strategic priorities are focused on delivering value to patients and society.

Delivering growth and therapy area leadership by supplying medicines that can transform care and ensuring that it reaches patients who need them. Accelerating innovative science in search of solutions that prevent, treat, and even cure, some of the world’s most serious health challenges.

Being a great place to work by living its values and behaviors, delivering as an enterprise team and leading in sustainability.

The fundamentals of the company’s strategy are focused on innovative science and leadership in its three main therapy areas: Oncology; Cardiovascular, Renal and Metabolism; and Respiratory diseases.

Backed by a global presence, with strength in Emerging Markets, particularly China, it has a portfolio of specialty and primary care medicines.

At the same time, the world around is changing and the burden of disease is increasing. It is responding by increasing its focus on growth through innovation – being more patient-centric, doing more with technology, digital and data, and advancing more cutting-edge science.

What are AstraZeneca’s Mergers and Acquisitions?

In late 2020, AstraZeneca agreed to acquire Alexion, a global biopharmaceutical company, for $39 billion. This acquisition allows the company to enhance its presence in immunology.

The double-digit revenue growth through 2025; acquisition strengthens AstraZeneca’s broad-based revenue and the company will further globalise Alexion’s portfolio. The acquisition will be immediately core earnings-accretive and value-enhancing, and is aligned with stated capital-allocation priorities.

What is AstraZeneca’s History?

AstraZeneca forerunner Imperial Chemical Industries (ICI) was created from the 1926 merger of four British chemical companies — Nobel Industries; Brunner, Mond and Company; United Alkali; and British Dyestuffs — in reaction to the German amalgamation that created I. G. Farben. ICI plunged into research, recruiting chemists, engineers, and managers and forming alliances with universities.

Between 1933 and 1935, at least 87 new products were created, including polyethylene.

Fortunes declined as competition increased after WWII. In 1980 ICI posted losses and cut its dividend for the first time. In 1982 turnaround artist John Harvey-Jones shifted ICI from bulk chemicals to high-margin specialty chemicals such as pharmaceuticals and pesticides.

That business became Zeneca, which ICI spun off in 1993.

The takeover specter loomed large over the company during its first year. Zeneca had several drugs in its pipeline, but it also had expiring patents on others, making them fair game for competitors. Bankrolled by its agrochemical business, Zeneca forged alliances with other pharmaceutical firms.

In 1994 it entered a marketing alliance with Amersham International (now Amersham) to sell Metastron, a nuclear-medicine cancer agent. The next year Zeneca formed a joint venture with Chinese companies Advanced Chemicals and Tianli to make textile-coating chemicals.

In 1995 Glaxo was forced to sell a migraine drug candidate to complete its merger with Wellcome. Zeneca’s gamble in buying the then-unproven drug (Zomig) paid off when the product gained US FDA approval two years later.

By 1997 Zeneca completed its gradual acquisition of Salick Health Care, formed to create more humane cancer treatment programs.

The purchase followed a trend of large drug firms moving into managed care, which raised concerns that centers might be pressured to use their parent companies’ drugs, but Zeneca maintained that Salick would remain independent except to the extent that it offered an opportunity to evaluate treatments.

In 1998 Zeneca got the FDA’s OK to sell its brand of tamoxifen (Nolvadex) to women at high risk of contracting breast cancer. In 1999 it sued Eli Lilly to protect Nolvadex against Lilly’s marketing claim that its osteoporosis treatment Evista reduced breast cancer risk, a use for which it was not approved.

In 1999 Zeneca completed its purchase of Sweden’s Astra to form AstraZeneca. That year the firm sold its specialty chemicals unit, Zeneca Specialties, to Cinven Group and Investcorp.

With its agricultural business stagnated due to crippled markets in Asia and Europe, AstraZeneca announced plans to merge the unit with the agrochemicals business of Novartis and spun it off as Syngenta.

In 2013 AstraZeneca sold its only non-pharma business, Aptium Oncology, an operator of cancer treatment centers in the US. This came on the heels of selling its other non-core units Astra Tech (medical devices) and Dentsply Sirona (dental implant systems).

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