How Will AstraZeneca (AZN) Stock Be Affected by Generic Copies?

AstraZeneca’s (AZN) drug Crestor is under pressure from cheaper generic versions.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- AstraZeneca (AZN) - Get Report  stock is up 0.03% to $30.12 this morning as the company files a lawsuit with the FDA to protect its cholesterol drug Crestor from generic copies.

Crestor delivers $7 million in daily profit in the U.S. for the U.K. drug company, but cheaper generic versions of the drug are selling at as much as 85% lower than Crestor's price.

The drug contributed $5 billion to AstraZeneca's revenue last year and represented about 20% of the company's earnings.

Crestor's exclusivity rights end today, July 8. Allergan (AGN) has had a generic version on the market since May after the companies settled a patent infringement suit.

In Allergan's drug's two months on the market, Crestor prescriptions dropped by a third.

In 2014, AstraZeneca managed to sign for seven years of additional exclusivity for Crestor in treatment of high cholesterol in children, but the FDA can still approve copies for adult usage.

Separately, TheStreet Ratings rated this stock as a "hold" with a ratings score of C+.

The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, TheStreet Ratings finds weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

You can view the full analysis from the report here: AZN

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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