The Nasdaq Composite index, known for its technology-heavy focus, recently dipped into correction territory before recovering. Despite this recovery, equities remain generally down for the year, although some companies are thriving amidst the volatility.
One such company is AstraZeneca (AZN), a pharmaceutical giant based in the U.K., whose stock has risen by 16% since the start of 2025. This significant increase is not an anomaly, and the stock could provide strong returns for investors who opt to hold onto it for the long term.
AstraZeneca’s financial performance has remained robust despite challenges. Last year’s upheaval, which included the arrest of several executives in China and an ongoing insurance fraud investigation, tested the company’s resilience. Despite these issues, AstraZeneca reported an 18% year-over-year revenue increase, reaching $54.1 billion. Adjusted earnings per share rose by 13% compared to the previous year. The company’s various therapeutic segments experienced sales growth, with the exception of the “other medicines” category in 2024.
The company continues to navigate these hurdles, and last year’s dip in stock value may have been excessive given its solid financial foundation. This overcorrection is likely why the stock has performed well since December and maintained that trajectory through this year’s market fluctuations.
In the short term, AstraZeneca faces a potential fine in China if found responsible for illegal drug importation, with fines ranging from 100% to 500% of unpaid importation taxes totaling $0.9 million. Even at the highest potential fine of $4.5 million, this represents a minor financial impact for a company with annual revenues in the tens of billions.
AstraZeneca is also confronting patent expirations in the U.S. The first pertains to Soliris, a treatment for paroxysmal nocturnal hemoglobinuria, and the second to Brilinta, a heart attack risk-reducer. Soliris’s sales declined by 18% to $2.6 billion in 2024 due to patients transitioning to a newer drug, Ultomiris. Brilinta saw a slight increase of 1% in sales to $1.3 billion, despite existing generic competition. Consequently, the expiration of these patents is unlikely to affect AstraZeneca’s long-term growth significantly.
Looking ahead, AstraZeneca offers promising prospects thanks to a comprehensive portfolio of medicines, an extensive pipeline, and consistent revenue and earnings growth. Fourteen of its medications each generated over $1 billion in sales last year. Despite some pending patent expirations, other drugs in the pipeline are set to bridge these gaps. For instance, Breztri, a COPD treatment, generated $978 million, marking a 44% increase from the previous year. Newer therapies, such as the cancer treatment Truqap, are also expected to contribute positively to AstraZeneca’s revenue growth.
Moreover, AstraZeneca is actively exploring the growing area of weight loss treatments. Its investigational oral GLP-1 therapy, AZD5004, is in phase 1 and 2 clinical trials across various indications, including diabetes and weight management. An additional potential GLP-1 medication, AZD9550, is also under early-stage evaluation.
AstraZeneca is conducting numerous clinical trials across a range of therapeutic areas. With over a dozen regulatory approvals or trial readouts in the fourth quarter, similar progress is anticipated in the future, enabling the company to maintain robust financial performance over time, even in the face of patent expirations.
While challenges exist, many investors already recognize the opportunities, as evidenced by the stock’s current performance. It could be a prudent time to consider acquiring shares in AstraZeneca, given the potential for excellent returns.
