The last time the AstraZeneca chief executive, Pascal Soriot, set long-term sales targets, he was greeted with a chorus of scepticism. It was 2014 and the company was fighting a takeover attempt by Pfizer of the US; Soriot seemed to be engaging in that age-old defence trick of throwing out a large number that he probably would not be around to deliver. A target to boost revenues by three-quarters over nine years looked wildly optimistic – a decade ago, the Anglo-Swedish firm was more laggard than leader in pharma-land.
In the event, of course, the milestone of $45bn was achieved ahead of time, which is why Tuesday’s latest long-term prediction of annual revenues of $80bn (£63bn) by 2030 will be treated as ultra-credible. Soriot is also still in post – and fit enough to do another five years, he said last year – so success or failure should be reasonably clear by the time he finally departs. As it is, growth was 19% in the last quarter, so a fast start is guaranteed.
One can can see also see how the pieces should fit together to hit $80bn, albeit the odd acquisition may be needed on the way. Growth in pharma is about ensuring you have more, and bigger-selling, new products to replace those that are losing their patents. AstraZeneca says it intends to launch 20 products by 2030, with 12 having the potential to generate peak annual sales of $5bn-plus.
With patent expiries for the period being modest versus historical averages, the bald arithmetic would seem to add up, even when taking account of inevitable individual failures in clinical trials and modest pressure on drug pricing in the US under the Inflation Reduction Act.
Nor should the vague-sounding line about “investing in transformative new technologies and platforms that will shape the future of medicine” be regarded as overly hopeful. The post-2014 transformation of AstraZeneca was about success in new fields, notably oncology (now 40% of revenues) and rare diseases (via the acquisition of Alexion in 2021).
This time around, the potentially interesting new piece in the portfolio is antibody-drug conjugates, a more refined technique to target cancer cells. That sounds more significant than a move into the crowded territory of anti-obesity treatments.
Not for the first time, one can reflect that seeing off Pfizer in 2014 was a history-turning moment, not just for AstraZeneca but also for the UK pharma industry. It is impossible to believe Soriot’s science-led investment-heavy approach would have survived under the would-be US acquirer, which at the time seemed mostly interested in the scope for cost cuts and tax efficiencies.
The takeover offer was worth £69bn, which felt enormous in 2014, but AstraZeneca these days is worth £190bn and is the UK’s most valuable listed company. There is a race with Shell (valued at £179bn) to be the first FTSE 100 stock to achieve the round number of £200bn. One of them will get there soon enough, but you have got very long odds in 2014 on it being AstraZeneca.
