The tech-heavy Nasdaq Composite index not too long ago entered correction territory. Although it was capable of climb out of it, equities broadly stay down for the yr. Nonetheless, some firms are performing nicely amid the volatility.
AstraZeneca (NASDAQ: AZN), a U.Ok.-based pharmaceutical large, is one in every of them; its inventory is up by a formidable 16% since January. This efficiency to date in 2025 isn’t a fluke. And the inventory could ship sturdy returns, if not within the subsequent few weeks, however for buyers keen to carry onto its shares for years.
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AstraZeneca’s monetary outcomes stay sturdy
AstraZeneca’s shares fell off a cliff late final yr when it introduced the arrest of a few of its executives in China, together with Leon Wang, the drugmaker’s president within the nation. That is on high of an insurance coverage fraud investigation in China it had been coping with, and allegations that the corporate imported unlawful pharmaceutical medicine into the nation.
Although these issues are price monitoring, AstraZeneca’s monetary outcomes actually aren’t a difficulty. Final yr, its income jumped by 18% yr over yr to $54.1 billion, a superb efficiency for a pharmaceutical giant. Adjusted earnings per share had been $8.21, 13% increased than the earlier fiscal yr. AstraZeneca operates a number of segments targeted on varied therapeutic areas, and each one besides “different medicines” noticed gross sales transfer in the proper course in 2024.
Even with the challenges that AstraZeneca is coping with now, final yr’s decline in its share worth could have been overdone, given the corporate’s sturdy monetary outcomes. That is probably why the inventory has carried out nicely since December, and has saved that momentum by way of market volatility this yr.
Quick-term points will not be a loss of life sentence
If it is discovered accountable for unlawful drug importation in China, AstraZeneca might incur a advantageous. The potential advantageous in China might quantity to 100% to 500% of the unpaid importation taxes of $0.9 million. At worst, AstraZeneca pays $4.5 million if it is discovered responsible — a drop within the bucket for an organization that generates tens of billions of {dollars} in annual income.
The corporate may also face two patent cliffs within the U.S. this yr. The primary is for Soliris, a medication for a uncommon blood illness referred to as paroxysmal nocturnal hemoglobinuria. The second is for Brilinta, a remedy used to cut back the danger of coronary heart assaults. Neither of those patent expirations must be a sport changer for AstraZeneca.
Soliris’ gross sales in 2024 totaled $2.6 billion, however declined 18% yr over yr on account of sufferers switching to AstraZeneca’s newer Ultomiris. Brilinta’s income in 2024 got here in at $1.3 billion, up 1% yr over yr — it was already dealing with generic competitors in different international locations. As a result of Soliris and Brilinta contributed little (if something in any respect) to the pharmaceutical large’s top-line progress final yr, the lack of exclusivity for these medicines will not hurt its prospects.
There may be lots to root for
AstraZeneca has so much to supply buyers: an enormous and diversified lineup of medicines, a deep pipeline, and regular income and earnings progress. Its lineup featured 14 medicines that every generated over $1 billion in gross sales final yr. Sure, some will lose patent exclusivity, however others will fill the hole. Breztri, a remedy for power obstructive pulmonary illness (COPD), got here in need of blockbuster status for AstraZeneca final yr with gross sales of $978 million, however they had been up by 44% in comparison with 2023. A number of different medicine must also proceed to assist drive sturdy top-line progress for the pharmaceutical chief, together with the newer most cancers remedy Truqap.
In the meantime, AstraZeneca’s pipeline will probably unearth extra gems. Like different drugmakers, it is now in search of to affix the promising weight reduction space. The corporate’s investigational oral GLP-1 remedy, AZD5004, is present process section 1 and a couple of medical trials throughout diabetes, weight administration, and several other different potential indications. (All at the moment permitted GLP-1 medicines are administered subcutaneously, so there might be an affordable demand for an oral choice.) The corporate’s AZD9550 is one other potential GLP-1 drugs in early-stage research.
Past that, AstraZeneca is working many medical trials throughout varied therapeutic areas. The corporate had over a dozen regulatory approvals or medical trial readouts within the fourth quarter. You’ll be able to anticipate extra of the identical each interval, which ought to permit its monetary outcomes to stay sturdy over the long term, even because it faces patent cliffs.
Traders ought to see previous the headwinds — many already are, because the inventory is performing nicely proper now. Nevertheless it’s nonetheless time to consider buying shares of AstraZeneca. The drugmaker might ship glorious returns.
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Prosper Junior Bakiny has no place in any of the shares talked about. The Motley Idiot recommends AstraZeneca Plc. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
