AstraZeneca CEO strikes bullish tone on pipeline as stock rallies

By Pushkala Aripaka and Patrick Wingrove

Oct 30 (Reuters) - AstraZeneca on Friday unveiled plans to save some $1.5 billion annually to invest in its drug pipeline, sparking the biggest one-day share rally in a year as CEO Pascal Soriot moved to shift the focus back to growth after a turbulent few months.

The more bullish tone signals a revival for the British-based drugmaker, a long-term market success story, which saw a drug trial miss and talk of a deal for smaller US rival Bristol Myers Squibb weigh down its shares earlier in the year.

"With multiple potential blockbuster assets in late-stage development and transformative technologies scaling rapidly, we are on track to deliver our 2030 ambition and to sustain growth through the next decade," Soriot said in a statement.

The firm gave few details about the cost-cutting plan, aimed at funding investment in its rapidly growing drug pipeline. However, shares in the Anglo-Swedish drugmaker were up nearly 7% by 1352 GMT, reversing losses from earlier in the year.

The company also beat third-quarter sales and profit forecasts, and maintained its 2026 outlook.

"These results should reassure investors after a turbulent period for what historically has been a really strong business," said Quilter Cheviot analyst Sheena Berry.

AstraZeneca is increasing investment across its business as CEO Soriot seeks to convince investors the company remains on track to achieve its target of $80 billion in annual revenue by 2030 despite recent clinical trial setbacks. The target relies in part on about 20 expected new drug launches.

RESTRUCTURING PLAN

The company said the three-year programme running through 2029 would reallocate resources across its business and generate annualised savings of about $1.5 billion, which would be reinvested mainly in its pipeline of more than 180 projects.

However, it provided few details. It did not say whether the programme would involve job cuts, though it expects to incur up to $2 billion in one-off restructuring charges.

Drugmakers are facing growing investor scrutiny over the strength of their pipelines as patents expire on established blockbuster medicines and future growth becomes increasingly dependent on successful late-stage trial results.

British rival GSK is also pursuing a cost-saving programme.

Questions over AstraZeneca's pipeline have intensified following setbacks involving camizestrant and Wainua. However, investors have generally remained confident that the breadth of the company's late-stage portfolio leaves it well placed to absorb disappointments.

THIRD-QUARTER BEAT

Core earnings for the quarter were $2.79 per share as revenue rose 7% at constant exchange rates to $16.21 billion, beating analysts' forecasts of $2.59 per share and $15.94 billion respectively.

Growth was driven by cancer and rare-disease medicines. Oncology revenue rose 17% to $7.77 billion, helped by a 35% jump in Enhertu sales to $969 million and a 26% rise in Imfinzi sales to about $2 billion.

The gains helped offset pressure from older products facing generic competition. Sales of diabetes drug Farxiga fell 25% to $1.61 billion.

AstraZeneca reported operating expenses of $27.56 billion in the first nine months of 2026, up 7% from a year earlier. It said costs would rise again in the fourth quarter in line with seasonal trends.

With 2026 guidance unchanged, analysts said investor attention is increasingly turning to 2027, when AstraZeneca expects a series of late-stage trial results that it says could support more than $20 billion in peak annual sales.

($1 = 0.7481 pounds)

(Reporting by Pushkala Aripaka, Sri Hari N S in Bengaluru and Patrick Wingrove in London; Editing by Joe Bavier, Mark Potter and Jan Harvey)