AstraZeneca, the UK's second biggest pharma company, is sticking to its full year guidance despite a continuing slump in profits as competition from generic drugs heats up.
Astra, which reports in dollars, saw core profits before tax of $2.164bn between April and June, a decline on 2011 of 33%, or 28% at constant exchange rates.
Total revenues for the period were $6.66bn, a 21% drop on 2011.
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The company has lost "exclusivity" on several of its most important brands, meaning the patent has run out and the generic manufacturers can start offering versions of the drug, invariably more cheaply than Astra chooses to. Astra estimates this is responsible for around half of the revenue decline.
There are also problems at the company's plant in Sweden which is limiting the supply chain; this dented second quarter revenues by around 2%.
Things are likely to get tougher for AstraZeneca as the patents expire on a series of key drugs between now and 2015, including on schizophrenia therapy Seroquel. In 2016 Astra's highly lucrative statin drug, Crestor, loses its patent in the all-important US market, where it is already suffering from generic versions of its rival, Pfizer's, Lipitor statin treatment.
There are also concerns about leadership at Astra, following the departure of Chief Executive David Brennan at the beginning of June. A search is being conducted for a replacement but until one is found the Chief Financial Officer Simon Lowth is holding the fort.
He said of today's results: "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."
He added though that he still felt the group was "on track" to achieve its full year targets.
The first interim dividend will be $0.90 per share. Shortly after the open AstraZeneca shares had fallen 0.74%.
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