AstraZeneca (AZN) Q3 2026 earnings review
AstraZeneca profit rises 17%, but a key cancer trial fails
AstraZeneca's cancer, rare-disease and asthma drugs are growing fast enough to absorb the loss of Farxiga to generics. Sales rose 7% at constant currency, and profit per share excluding one-offs climbed 17% because costs hardly moved. Chief executive Pascal Soriot kept the full-year plan, which by our math leaves fourth-quarter profit roughly flat.
| Sales excluding Farxiga and Brilinta | +12.5% by our math; +7% for the whole group at constant currency |
|---|---|
| Revenue | $16.2 billion +7% at constant currency, +6.7% at actual rates |
| Profit per share, excluding one-offs | $2.79 +17%; +19% at constant currency |
| Full-year outlook | Unchanged nine months at 7% growth, the middle of the range |
⚖️ Verdict: 🟢 Bullish
The story got better because the drugs already on sale outgrew what the plan needs and the margin widened without price rises. Costs rose 2% while sales grew 7%. The bad news: Etcamah's largest breast cancer trial failed and two big lung cancer readouts slipped into next year.
The question now is whether next year's readouts can replace what Etcamah's failed trial took out of the 2030 plan. Soriot says this year's readouts added value even after two failures. The other reading is that the largest opportunities keep missing while the wins are smaller. AVANZAR, the Datroway lung cancer trial due in early 2027, will tell.
🐂 Bull Case
Sales Outside Farxiga and Brilinta Grow 12.5%
AstraZeneca is losing two big heart and diabetes drugs to generic copies. Farxiga, a diabetes and heart-failure pill, lost US protection in April; Brilinta, a blood thinner, went generic last year. Everything else must outgrow that loss, and this quarter it did.
Sales of the rest of the business rose about 12.5% by our math, against 7% for the whole group. The cancer unit did most of the work, because Imfinzi, Enhertu and Calquence each outpaced the group.
- Oncology: $7.8 billion, up 17%
- Farxiga: $1.6 billion, down 25%
- Farxiga in the US: $127 million, down 71%
- Respiratory and immunology: up 11%, with the asthma drug Tezspire up 51%
The standing worry was that Farxiga and Chinese price cuts would push the year to the bottom of the plan. Nine months at 7% sit at the middle instead, and by our math the plan needs the same 7% in the fourth quarter.
What to watch: fourth-quarter sales growth excluding Farxiga and Brilinta, due 9 February. A rate near 12% would show the newer drugs can carry the group until the US generic comparison eases next April.
Costs Rise 2% While Sales Grow 7%
AstraZeneca earned a wider margin because costs barely moved while sales kept growing. Finance chief Aradhana Sarin said the money went into the Baxfendy and tozorakimab launches, yet the bill rose far more slowly than revenue.
- Operating margin excluding one-offs: 36.1%, up 3.3 points
- Research spending: 22.5% of sales, down 0.9 points
- Selling and administrative costs: 24.1% of sales, down 1.0 point
One caution: a fifth of the profit gain came from other operating income, including $100 million from selling its Zoryve stake. Without it, operating profit excluding one-offs still rose 14% by our math, twice the pace of sales.
What to watch: the full-year operating margin excluding one-offs, due 9 February. Sarin said "we made a commitment to our 2026 margin" in the mid-30s. Nine months stand at 35%.
First In-House Cancer Conjugate Doubles Survival Time
Antibody-drug conjugates, or ADCs, attach chemotherapy to an antibody that finds tumour cells. AstraZeneca shares Enhertu and Datroway with Daiichi Sankyo, so sonesitatug vedotin is its first wholly owned ADC.
In the CLARITY-Gastric01 trial the drug cut the risk of death by 53% in stomach cancer patients after two or more treatments. They lived a median 10 months against 5. Survival also improved in the broader second-line group, though not time without cancer growth.
This matters because chief executive Pascal Soriot now puts the drug at $3 to 5 billion of peak annual sales. Zegfrovy, a lung cancer pill licensed from China's Dizal, booked its first $3 million.
What to watch: whether regulators accept a filing covering second-line patients, which would put the drug near the top of Soriot's range.
🐻 Bear Case
Etcamah Failed Its Largest Trial; Two Readouts Slipped
AstraZeneca counts Etcamah, its new breast cancer pill, among twelve drugs with $5 billion-plus peak sales potential. Much of that value sat in SERENA-4, which tested the pill as a first treatment for advanced breast cancer.
In September the trial "did not meet the primary endpoint of PFS, however a numerical improvement was observed", the company said. The same quarter it stopped two other late-stage trials, and an efzimfotase alfa study missed.
Chief executive Pascal Soriot said "definitely the net NPV has gone up versus our risk adjusted earlier forecast" once he counts the positive readouts. His own slide tests that: Etcamah keeps its $5 billion-plus label. It now rests on a narrower use, for tumours with a particular mutation, and on a trial due late next year.
Two more readouts slipped. AVANZAR, a Datroway lung cancer trial, and TROPION-Lung15 were due this year; the appendix now lists both as "Data anticipated: H1 2027". Of the four big readouts flagged last quarter, only SAFFRON delivered.
What to watch: AVANZAR, due in the first half of 2027. A failure there would put a second $5 billion-plus label in doubt within a year.
US Pricing Rules Delay Medicare Sales for New Launches
AstraZeneca faces Medicare price negotiation on Calquence, its blood cancer drug, from 2027. It also lists last year's US pricing deal among the reasons gross margin did not rise.
The rules slow launches. Baxfendy, a blood-pressure pill launched in the second quarter, has "12,000 new patient starts" but only $9 million of sales. Ruud Dobber, head of biopharmaceuticals, expects most revenue from commercially insured patients "ahead of anticipated Medicare Part D reimbursement in 2028".
This matters because the 2030 plan relies on these launches while Farxiga shrinks. Chief executive Pascal Soriot sums up the deal: "US prices would decline a little bit and European prices would go up a little bit".
What to watch: Baxfendy's quarterly sales through 2027. A rising run-rate before Medicare coverage would show demand, not access, sets the pace.
Risks This Quarter Did Not Settle
Four standing concerns got partial readings this quarter, and none closed. Two with fresh numbers moved in AstraZeneca's favour; the longer-term two got words only.
- Patent losses after 2032: chief executive Pascal Soriot said of outside forecasts "everybody looks at it, sees us decline post-2031 or '32", and offered the pipeline slide; no new target, no date.
- Tagrisso competition: sales rose 12%, but in Japan and other established markets they fell 1% at constant currency on a new rival; China's next figure tests it.
- Chinese bulk purchasing: China sales rose 3% at constant currency after falling last quarter; the fourth quarter's hospital budget caps test it.
- Cash generation: operating cash flow fell 11% over nine months on Farxiga working-capital effects finance chief Aradhana Sarin expects to last until year-end; year-end tests it.
👓 Other Themes
A $2 Billion Restructuring Will Fund the Pipeline
AstraZeneca announced Reshaping for Sustainable Growth, a three-year programme to shift spending toward its pipeline and new technologies. It will cost up to $2.0 billion, "more a cash cost", finance chief Aradhana Sarin said, and free $1.5 billion a year once complete. Chief executive Pascal Soriot said "every dollar we can save, we reinvest in the pipeline", and Sarin added "We will not provide long-term margin guidance".
AstraZeneca Buys 12% of Summit for $2 Billion
In October AstraZeneca paid $2 billion for about 12% of Summit Therapeutics, whose ivonescimab is a two-target antibody for cancer. The plan pairs it with AstraZeneca's ADCs, starting with sonesitatug vedotin and Datroway, each company supplying its own drug and sharing trial costs. The stake sits outside this year's $2.5 billion of milestone payments, and the premium paid becomes a one-time finance cost in the fourth quarter.
💲 Other KPIs
Alliance revenue, AstraZeneca's share of profit on drugs that partners sell, rose 36% from a year ago. Enhertu and Tezspire drive it. It has grown between 29% and 46% in each of the last five quarters. It now makes up 7% of revenue, so partnered medicines are a growing share of the profit base.
Cash from operations minus capital spending fell 15% in the first nine months by our math. Operating cash flow dropped 11% because working capital moved against the group, mostly from Farxiga's US generic entry, and tax paid rose. Capital spending grew 9% to $2.3 billion, and finance chief Aradhana Sarin expects the working-capital drag to last until year-end.
Net debt rose $2.5 billion since December. Deal payments of $4.3 billion and dividends of $5.0 billion outran cash generation. That is 1.2 times the last twelve months' EBITDA, and finance chief Aradhana Sarin said "we remain comfortable with our current level of gross debt". AstraZeneca paid the $2 billion Summit stake in October, after the quarter closed.
🔮 Guidance
Unchanged. The plan still calls for sales growth of roughly 5% to 9% at constant currency. Nine months sit at 7%, the middle of that range. By our math that leaves about 7% for the fourth quarter at the middle. Across the whole range, the quarter could fall 1% or rise 15%. Currency should add a low single-digit amount at actual rates, also unchanged.
Unchanged. Profit per share excluding one-offs should rise 10% to 13%. Nine months are up 14%, above the range, and finance chief Aradhana Sarin did not raise the plan. By our math that leaves the fourth quarter roughly flat, between a 3% fall and a 10% rise. Costs step up every fourth quarter; this year adds higher interest and the one-time Summit premium.
Unchanged. Nine months ran at 19%, near the bottom of the range, and the third quarter at 21%. So the full year lands inside the range without any one-off help.
Cut. By our math capital spending now rises about 13% to roughly $3.7 billion. The earlier plan, a rise of about a third, pointed to $4.4 billion. Finance chief Aradhana Sarin cited "some project starts now moving into 2027", so about $665 million shifts into next year rather than disappearing. Nine months stand at $2.3 billion.
Raised slightly. Other operating income, which is royalties and gains on selling rights to older drugs, should come in a little above the first half's $341 million. The third quarter alone brought $277 million, so by our math the fourth quarter drops to roughly $100 million. That drop is one reason the plan has fourth-quarter profit flat.
Unchanged. The board still intends $3.30 per share this year, up from $3.20. Shareholders received the $1.06 interim in September. There are no buybacks; dividends cost $5.0 billion in the first nine months.
❓ Key Questions
What fourth-quarter growth does the plan assume without Farxiga?
Nine months excluding Farxiga and Brilinta grew 12% at constant currency. The plan implies about 7% group growth in the fourth quarter by our math. The erosion rate behind that would show whether the middle of the range is cautious.
How much of other operating income will recur next year?
Of $618 million over nine months, AstraZeneca itemises only the $100 million Zoryve sale. Sarin was asked twice last quarter for the split between royalties and one-off disposals and declined; next year's profit base depends on it.
What are Etcamah's peak sales without SERENA-4?
The pipeline slide still shows Etcamah above $5 billion a year after its first-line trial failed. The remaining uses are a narrower mutation-triggered setting and the CAMBRIA-1 early breast cancer trial, due late next year.
Will the operating margin hold while restructuring costs land?
The margin excluding one-offs reached 36% this quarter. But up to $2 billion of restructuring charges, launch spending for tozorakimab and Baxfendy, and Calquence's Medicare price cut all arrive next year. Sarin declined to give long-term margin direction.
How large is the patent cliff after 2032?
Soriot acknowledged that outside forecasts show the company declining after 2031 or 2032 as Tagrisso, Imfinzi and Lynparza lose protection. He has not said when, or whether, he will set a growth target beyond 2030.