Kedar Grandhi
AstraZeneca is planning to give more priority to its
oncology business. The Anglo-Swedish pharmaceuticals firm will focus on
cancer treatments in an attempt to streamline operations and help
increase revenues. It also plans to initiate a cost cutting drive that
could help save it about $1.1bn (£754m, €966m) annually.
Pascal Soriot, chief executive at AstraZeneca, said he would
give more importance to the flow of investments. He added that the
company would increase spending on oncology while reducing commercial
and manufacturing operations which would result in a "material decline"
in selling, general and administrative expenses in 2016 and 2017.
The measures will help the company with a net annualised
savings of $1.1bn. "This, together with the drive for greater
efficiency, will deliver a material decline in core costs this year and
next," AstraZeneca said. However, the measures will cost the London
headquartered company a one-off restructuring charge of $1.5bn.
AstraZeneca aims to touch annual revenues of at least $45bn
by 2023. This is about 80% more than the $24.7bn revenues it clocked in
2015. The company is expecting to achieve this target with the help of
its oncology unit.
The news came as AstraZeneca reported its first quarter results.
The company said its revenues for the quarter rose 1% to $6.12bn. While
this beat analyst expectations, the drug maker's core operating profit,
which is its preferred metric to compare growth, slid 12% to $1.59bn.
Referring to the results and its growth strategy, Soriot said: "I was particularly
pleased with the results in China, where we continued to deliver
double-digit sales growth, and with the progress of our new oncology
launches. We are further sharpening our strategic focus on our main
therapy areas, intensifying our efforts in oncology and accelerating
collaborations in opportunistic areas. We are also driving greater
efficiency across the organisation to support the advancement of our
strategy."
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