How AstraZeneca plc (ADR) (AZN) Measures Up as a GARP Investment

Indeed, AstraZeneca plc (ADR) (NYSE:AZN)’s low rating can be attributed to fears over patent expiries, which are expected to last over the medium term at least. This not only rules out the firm as a viable GARP play, but the issue puts the firm at jeopardy of strong earnings pressure well into the future.

Customizable conclusion
AstraZeneca plc (ADR) (NYSE:AZN) has come under relentless pressure in recent years as its stable of products have lost patent protection.

Last week, the U.S. authorities issued a temporary injunction banning the distribution of generic versions of the firm’s Pulmicort Repsules medicine, which is used to combat asthma, after AstraZeneca plc (ADR) (NYSE:AZN) appealed against an earlier ruling that rendered its patent invalid. But the company is fighting a losing battle as its drugs portfolio come under increasing attack.

The loss of exclusivity in key regional markets for its Seroquel IR, Atacand and Crestor products in quarter one were decisive factors in AstraZeneca’s 12% revenues fall, to $6.4 billion, a result that pushed profit before tax 31% lower to $1.3 billion. The pharma giant has announced massive transformation plans to boost R&D and deliver future growth, but this is expected to take years to turn the company’s fortunes around.

The article How AstraZeneca Measures Up as a GARP Investment originally appeared on Fool.com.

Fool contributor Royston Wild has no position in any stocks mentioned. The Motley Fool recommends GlaxoSmithKline plc (NYSE:GSK).

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