Drug giants GSK and AstraZeneca have reported better-than-expected first-quarter profits, driven by strong sales of cancer treatments. AstraZeneca posted a 12% rise in operating profits to $4.25 billion (£3.14 billion) for the three months to March, with sales up 8% on a constant currency basis to $15.3 billion (£11.3 billion). Cancer drugs accounted for 45% of total revenues.
GSK also exceeded forecasts, with sales rising 5% to £7.6 billion and first-quarter earnings up 9% to £2.3 billion. The results mark a strong start for new chief executive Luke Miels. Almost half of GSK's sales came from speciality medicines, including a 28% increase in cancer drug sales.
Dan Coatsworth, head of markets at AJ Bell, noted: 'AstraZeneca's treatments are flying off the shelf, helping to drive solid revenue and earnings growth. It won a host of regulatory approvals on various treatments. There is significant momentum in the business.' He added that GSK also enjoyed a good quarter with existing product sales and progress in the laboratory.
Despite the positive results, shares in both companies fell, with GSK down 4% and AstraZeneca down 2%, amid wider declines on the FTSE 100 Index and as both firms refrained from upgrading their full-year earnings outlook. Coatsworth suggested the lack of an upgrade may have left investors 'feeling short-changed against a solid start to the year.'
