Pharmaceutical giant AstraZeneca has warned earnings will come in at the lower end of expectations after it took a $381.5m hit from failed drug tests.
The company has stopped development of its ovarian cancer treatment olaparib and also said its antidepressant compound TC-5214 had not met targets.
As a result, AstraZeneca will take pre-tax impairment charges totalling $381.5m to R&D expense in the fourth quarter of 2011, it said.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
These impairments would push down the company's core earnings per share by around $0.21 in the fourth quarter, it said.
This meant that while full year core EPS would remain in the predicted range of $7.20 to $7.40, earnings were likely to be in the lower half of this scale.
The company is taking an impairment of $285m pre-tax charge due to the failure of olaparib, with a further $96.5m hit based on the lower probability of success for the remaining TC-5214 studies.
Shares in AstraZeneca fell 2% in early trading following the announcement.
-
Lloyds axes foreign currency fees for Club Lloyds customersClub Lloyds customers will be able to withdraw their money abroad without incurring any extra fees
-
How to invest during stagflationTrump’s tariffs look poised to push the global economy into a period of stagflation. We look at how to ensure your investments can survive a global slowdown.
