AstraZeneca (AZN) holds 2026 guidance as oncology growth offsets a 25% fall in Farxiga

AstraZeneca reported third-quarter total revenue of $16.2 billion on 30 October, up 7% at constant exchange rates, and core earnings per share of $2.79, up 19%. Over the first nine months revenue rose 7% to $46.9 billion and core EPS increased 14% to $8.00. The company reconfirmed its 2026 guidance for total revenue growth by a mid-to-high single-digit percentage and core EPS growth by a low double-digit percentage, both at constant exchange rates.

Oncology did the heavy lifting. Revenue in the division rose 17% to $7.77 billion, or 48% of the group total. Imfinzi grew 26% to $1.99 billion, Tagrisso 12% to $2.09 billion, Calquence 16% to $1.07 billion and Enhertu, shared with Daiichi Sankyo, 35% to $969 million. Datroway more than tripled to $78 million, a figure that remains small relative to the expectations attached to the antibody-drug conjugate.

The weakness sits in cardiovascular, renal and metabolism, where revenue fell 18% to $2.64 billion. Farxiga, long the division's largest product, declined 25% to $1.61 billion in the quarter. Elsewhere the picture was firmer. Respiratory and immunology revenue rose 11% to $2.52 billion, led by Tezspire, up 51% to $429 million, while rare disease grew 10% to $2.63 billion on the back of Ultomiris, up 19% to $1.43 billion. Wainua added $68 million, up 17%, a modest contribution after its failed ATTR-CM outcomes trial narrowed its prospects in the larger cardiomyopathy market.

Geographically, Europe was the strongest region, with revenue up 12% at constant currency to $3.71 billion. The United States, which accounts for 43% of revenue, grew 5% to $6.90 billion, and China rose 3% at constant currency to $1.92 billion, or 9% at actual rates. Core operating margin reached 36%, four percentage points higher than a year earlier at constant currency, helped by core research and development costs that rose only 3% to $3.65 billion, or 22% of revenue. Earnings are growing faster than sales partly because spending is being held back.

The pipeline record in the quarter was mixed. DESTINY-Lung04 showed Enhertu reducing the risk of progression or death by 37% in first-line HER2-mutant lung cancer, with median progression-free survival of 14.3 months against 8.3 months, and the SAFFRON and SANOVO trials of Tagrisso with Orpathys both met their primary endpoints. Against that, camizestrant missed its primary endpoint in the SERENA-4 first-line breast cancer study, although it won US approval as Etcamah in September on the basis of SERENA-6, while volrustomig's eVOLVE-Lung02 trial was stopped for futility and Ultomiris was discontinued in delayed graft function.

Chief executive Pascal Soriot said the company remains on track for its 2030 ambition and pointed to readouts in 2027 that he said carry a potential of more than $20 billion. Capital is also flowing outward: the company has taken a $2 billion stake in Summit Therapeutics, about 12% of its common stock, extending its bet on ivonescimab, and is running a restructuring programme with up to $2.0 billion of one-time costs intended to deliver $1.5 billion of annualised savings by the end of 2029.

The guidance itself deserves scrutiny. Core EPS growth of 14% over nine months, set against a full-year target of low double-digit growth, implies either a slower fourth quarter or a degree of caution. Neither would be surprising given Farxiga's trajectory, but the absence of an upgrade after a quarter of 19% core EPS growth suggests management sees less room for further margin expansion than the third quarter alone would imply.

The investment question is how much of AstraZeneca's value now rests on oncology execution. With cancer medicines approaching half of revenue and cardiometabolic sales in decline, the 2027 readouts and the uptake of Datroway and Enhertu in new indications will determine whether the 2030 ambition is a credible plan or a stretch target.