LONDON -- AstraZeneca's (LSE: AZN.L ) sales fell 21% to $6.66 million in the second quarter, as the company's been hit hard by generic competition and challenging market conditions.
For the first six months of the year, AstraZeneca posted revenues of $14 billion and profits of $3.8 billion, down 16% and 38%, respectively.
Like other big drugmakers, AstraZeneca has been hit by falling drug prices in Europe, where governments are taking extreme measures to reduce health care costs.
AstraZeneca's revenues were reduced by an estimated $300 million in the second quarter as a result of government cost cutting in Europe and some other markets, it said.
Today's report follows rival GlaxoSmithKline's (LSE: GSK.L ) announcement on Wednesday that it will revise down its 2012 sales outlook to "flat" -- caused mainly by the same troubles in Europe.
Following the early exit of AstraZeneca's chief executive at the end of May, and facing patent losses that are eroding revenue, Britain's second-biggest drugmaker has been aggressively trying to secure deals in order to bolster its pipeline.
In June, it secured a deal with Bristol-Myers Squibb to share the cost of buying U.S. diabetes specialist Amylin Pharmaceuticals for $7 billion. The deal was the largest in a number of recent acquisitions for Astra.
Interim CEO Simon Lowth said:
As we expected, the loss of exclusivity on some key brands and tough market conditions have resulted in a decline in revenue and earnings in the second quarter. Despite these challenges, we are on track to achieve our financial targets for the full year.
Our long-term priorities remain unchanged. We are driving the performance of brands that retain exclusivity, investing in markets with long-term potential, reshaping the cost base for sustainable competitiveness and continuing to drive for productivity on our investments in innovation, whether internally or externally sourced.
Shares in AstraZeneca hit a 2012 low after the early exit of its chief executive at the end of May, but have recovered recently.
Though Europe is proving difficult for big pharma, Astra's U.S. sales are also struggling, down 29% in the quarter. The loss of drug powerhouse Seroquel accounted for 80% of the hit. Sales in emerging markets also disappointed, growing just 1% for Astra.
AstraZeneca reiterated its forecast for a fall in full-year core earnings to $5.85 to $6.15 a share, versus $7.28 in 2011, with revenues set to decline somewhere in the range of 15%.
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