AstraZeneca Has an $80 Billion Dream and a Plan to Fix Its Stalling Stock

AstraZeneca expects a three-year cost-savings program to drive roughly $1.5 billion in annual savings through 2029. (Qilai Shen/Bloomberg)

Key Points

AstraZeneca unveils a three-year cost-savings program to generate about $1.5 billion in annualized savings by 2029.
CEO Pascal Soriot wants to reassure investors that AstraZeneca can reach $80 billion in annual revenue by 2030.
AstraZeneca reports third-quarter adjusted earnings of $2.79 a share, beating Wall Street expectations of $2.59 a share.

AstraZeneca on Friday unveiled a sprawling cost-savings program to revitalize its business. While the real test lies in execution, early investor enthusiasm could drive a rebound in the stock price.

AstraZeneca expects the three-year plan, running through 2029, to generate roughly $1.5 billion in annualized savings. The funds will be reinvested back into the drugmaker’s pipeline.

The move comes as CEO Pascal Soriot and top management seek to reassure investors that the company can recover from recent clinical stumbling blocks while staying on track for $80 billion in annual revenue by 2030—a goal that hinges in part on launching 20 new products, according to Soriot. The company has “multiple potential blockbuster” drugs in late-stage development, Soriot said Friday.

While AstraZeneca has considerable ground to recover, the cost-savings plan is a start. Freeing up cash to develop new drugs could provide a much-needed lift to the stock, which has stalled behind pharma peers. Heading into Friday’s session, the drugmaker’s U.S.-listed shares had fallen 0.6% this year, even as similarly sized rivals like Amgen and Novartis outpaced the broader market.

Shares suffered turbulent drops this summer on the back of clinical setbacks and short-lived merger rumors with Bristol Myers Squibb . Concerns over AstraZeneca’s prospects intensified in July after gene-silencing drug Wainua missed the mark in a clinical trial, though analysts sensed an overreaction.

Details about the cost-savings program were sparse. Management didn’t say whether the plan would involve layoffs, noting only that the company expects to incur up to $2 billion in one-time restructuring expenses.

The news overshadowed AstraZeneca’s third-quarter earnings report, released Friday before the opening bell. Demand for cancer and rare-disease therapies drove strength in the quarter, with oncology revenue climbing 17% to $7.77 billion.

Those gains helped offset weakness in AstraZeneca’s cardiovascular, renal, and metabolism business, which houses former blockbuster Farxiga. Sales of the diabetes medication fell 25% to $1.61 billion in the latest quarter, continuing a downtrend triggered by its loss of exclusivity last year and the approval of the first generic in April 2026.

Adjusted earnings of $2.79 a share beat analysts’ calls for $2.59, while total revenue climbed 17% to $16.21 billion, ahead of the $16 billion Wall Street had forecast. Crucially, the drugmaker left its 2026 outlook unchanged, guiding for revenue growth in the mid-to-high single digits and earnings growth in the low double digits.

While the company may appear to be pacing itself by only reiterating guidance, J.P. Morgan analysts believe the forecast, coupled with the earnings beat, should be “well received” by the market.

That thesis, so far, is playing out. Shares climbed 6.1% to $185.10 in premarket trading Friday as futures tracking all three major U.S. stock indexes traded in the red.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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