* CEO sees lower 2010 core EPS, in $5.75-$6.15 range
* Q4 core EPS of $1.42, vs $1.57 forecast
* To cut additional 8,000 jobs --12 pct of workforce
* Plans share buyback to support stock
* Shares fall 3.3 percent, analysts cautious
(Adds analysts, updates shares, adds Lilly, Bristol)
By Kate Kelland
LONDON, Jan 28 Drugmaker AstraZeneca gave a
downbeat forecast for 2010 with fourth quarter earnings that
missed expectations and sought to ease pressure on its stock
with a share buyback and job cuts.
The Anglo-Swedish company said on Thursday it saw earnings
per share for 2010 in a range of $5.75 to $6.15, down from $6.32
in 2009, and said revenue would be hit by the expected loss of
market exclusivity for some key drugs in the United States.
"The next five years will be challenging for the industry
and for the company, as its revenue base transitions
through a period of exclusivity losses and new product
launches," Astra said in a statement.
CEO David Brennan said he expected loss of exclusivity on
AstraZeneca's breast cancer drug Arimidex and asthma medicine
Pulmicort Respules to squeeze revenues, but was confident it
could grow market share for medicines that retain exclusivity.
Investors are focusing on outlooks for 2010, a year when a
series of factors including ever-increasing generic competition
to big-selling medicines and proposed U.S. healthcare reform
could weigh on companies' top and bottom lines.
Astra said it expected a fall in sales of up to the
"mid-single-digit" this year as benefits from H1N1 swine flu
vaccines and unexpected revenue from heart drug Toprol XL,
thanks to market withdrawal of generic competitors, wash out.
Analysts at Deutsche Bank and S&P Equity Research were
cautious about the company's long-term outlook. They pointed to
potential risks from an upcoming patent trial in the United
States over the cholesterol drug Crestor and U.S. regulators
decision on the heart drug Brilinta.
AstraZeneca forecast of revenues of $28-$34bn over 2010-14,
including $4-6bn of revenues from new drugs, pipeline products,
licensing deals. Deutsche Bank said the range was in line with
consensus, but the "fresh" element would prompt debate among
analysts and investors.
AstraZeneca shares were down 3.02 percent to 29.53 pounds by
1310 GMT, versus a 0.14 percent drop in the DJ Stoxx European
healthcare sector .SXDP
Two big U.S. drugmakers, Eli Lilly (LLY.N) and Bristol-Myers
Squibb (BMY.N), were also reporting on Thursday. Lilly's profit
fell short, while Bristol's beat forecasts, and both gave
forecasts for the coming year in line with expectations.
BUYBACK, JOB CUTS
Astra said it would buy back up to to $1 billion in shares
in 2010 and cut an additional 8,000 jobs in a bid to cut costs.
The company's website says it employs 65,000 people worldwide,
making the job cuts about 12 percent of that.
It said it expected restructuring to cost around $2 billion
and deliver annualised cost savings of some $1.8 billion by
2014. "These proposed changes will ensure our business remains
competitive in the future," it said in a statement.
Astra's exposure to generics is shown in its valuation,
trading at just 8 times forecast 2011 earnings, a discount to
rivals like GlaxoSmithKline (GSK.L), Novartis NOVN.VX, Roche
ROG.VX and roughly in line with France's Sanofi-Aventis
(SASY.PA), which also has considerable exposure to generics.
Astra's core pretax profit rose 10 percent to 2.88 billion
in the fourth quarter, giving earnings per share of $1.42 on
sales up 9.0 percent at $8.95 billion.
The mean consensus forecast had been for fourth quarter core
earnings, which exclude certain restructuring costs and charges,
to come it at $1.57 per share and sales at $8.85 billion,
according to Thomson Reuters I/B/E/S/.
(Additional reporting by Paul Sandle and Sam Cage; Editing by