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heads toward Thursday's release of first-quarter financial results with many analysts saying the news could be quite good -- but maybe not good enough.

The first quarter, they explain, will benefit significantly from some major one-time expense comparisons. For example, expenses for the cholesterol drug Crestor will be much lower in the first quarter of 2005 than in the first quarter of 2004, when the drug was in its early launch stage.

The first quarter of 2005 won't have any launch expenses associated with the anticoagulant Exanta, because the Food and Drug Administration rejected the drug in October, saying its risks of liver damage outweighs its benefits. The FDA's decision was a severe blow to AstraZeneca executives, who had been counting on Exanta as a cornerstone of future growth, especially as a treatment for preventing blood clots and reducing the risk of stroke.

And the first quarter won't see much revenue from

the lung cancer drug Iressa, considering the announcement of test results in December that showed patients taking Iressa had the same survival rates as those taking a placebo.

Issues like these ensure that a quarterly financial report from the Anglo-Swedish drug giant is rarely dull. AstraZeneca can be counted on to offer a mixture of big products, big controversies and big question marks. That's why analysts disagree sharply about the company. According to Thomson First Call, there are three buy ratings, four sell recommendations and six neutral ratings.

Goldman Sachs predicts that earnings per share for the three months ended March 31 should jump by 25%. But analyst John Murphy notes that such a comparison must recognize the Crestor launch costs that caused first-quarter 2004 operating profits to fall by 17%. Then, there's what Murphy calls "cost avoidance," such as the lack of launch expenses for Exanta. Murphy, who has an in-line rating on the stock, doesn't own shares. His firm has an investment banking relationship.

The first quarter should be AstraZeneca's strongest this year, thanks to "easy comparison numbers" for the same period last year, says Sten Westerberg, of the Swedish investment banking firm Ohman, in a recent report to clients.

The first half of 2005 will look good vs. the first half of 2004, thanks to comparatively high expenses last year and improved cost controls this year; but the second half of 2005 "will have a more difficult comparison," he says.

Westerberg predicts first-quarter earnings per share of 59 cents, up 26%. That's the same call made by Goldman Sachs. Westerberg, who has an accumulate rating on the stock, doesn't own shares. Westerberg's firm says it may provide financial services to companies mentioned in research reports.

Analysts say the first quarter should produce solid growth for Nexium, the heartburn/ulcer medication that is the company's biggest seller. Goldman Sachs looks for a 16% gain to $1.09 billion.

Nexium is often criticized by consumer advocates and some managed-care organizations, who say the drug is basically identical to an older cousin, Prilosec, but much more expensive, because Prilosec is subject to generic competition.

The Ohman firm says U.S. Prilosec sales dropped 59% to $366 million last year; worldwide sales skidded by 25% to $1.95 billion. Global sales of Nexium rose 18% to $3.88 billion last year, but the U.S. component gained only 10% to $2.72 billion. Analysts say Nexium could hit its sales peak this year or next year.

In a strange twist of fate, Nexium appears to be benefiting from


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Sept. 30 decision to withdraw the arthritis drug Vioxx from the market. Vioxx was the only drug allowed by the Food and Drug Administration to claim that it caused fewer gastrointestinal side effects vs. other pain relievers.

With Vioxx off the market, patients began turning to the other pain medications, and their doctors began prescribing Nexium and other proton-pump inhibitors to provide extra stomach relief.

As a result, Nexium, whose prescription growth rate had been declining, has enjoyed a modest rebound in both new and total prescriptions, says a recent report by Sanford C. Bernstein & Co. Even Prilosec, which had been losing prescriptions steadily, enjoyed positive prescription returns for several months following the Vioxx withdrawal.

"Even if recent volume growth

for Nexium and Prilosec is sustainable in 2005, we still believe pricing pressures will override and prevent proton pump inhibitor revenue growth beyond 2006," says Gbola Amusa, author of the March 29 Bernstein report. Amusa, who has a market perform rating, doesn't own shares. Bernstein has a non-invesment banking relationship with AstraZeneca.

Another big gainer during the first quarter will be the antipsychotic Seroquel, whose sales should grow 37% to $614 million, Goldman Sachs says.

Wall Street will be watching Seroquel sales in subsequent quarters to gauge the impact by the FDA's recent ruling that the AstraZeneca drug, and all other medications in the category known as atypical antipsychotics, carry

stronger warnings about unapproved uses.

Federal law allows a doctor to prescribe a drug for any use as long as the FDA has approved the product for a single disease or condition. In the case of Seroquel and its peers, the FDA warns against the "off label" use in treating behavioral problems of elderly patients who suffer from dementia. According to the FDA, studies show elderly patients taking these drugs have a 1.6 to 1.7 times greater risk of death than patients who don't take the drugs.

On the one hand, worldwide sales growth for Crestor looks good for the first quarter -- up 94% to $250 million, by Goldman Sachs estimates. On the other hand, the drug is so drenched in controversy and uncertainty that analysts have trouble predicting a degree of growth. So far, sales have grown slower than the company and analysts had predicted. Goldman Sachs notes that fourth-quarter 2004 sales were $312 million.

"Crestor has bottomed out in the U.S. in recent months," says Westerberg, who predicts first-quarter sales of $281 million and says a new direct-to-consumer campaign should lead to improved market share. Westerberg sees market share expanding from 5.4% in 2004 to 11% in 2008.

By some accounts, Westerberg is an optimist.

A recent report by Morgan Stanley, using data by prescription-tracker IMS Health, shows that Crestor's U.S. market share continues to fade in terms of new prescriptions. Crestor placed fifth among brand-name cholesterol drugs with a 6.7% market share for the fourth quarter. Morgan Stanley estimated Crestor would remain in fifth place during the first quarter of 2005 with a market share of 5.6%.

"Prescription trends indicate that Crestor's ramp-up remains underwhelming," David Moskowitz of Friedman Billings Ramsey said in an April 14 report to his clients. He has an underperform rating on the stock, noting that investors "remain willing to pay a premium price for near-term earnings growth and the hope that the company's long-term outlook will improve." He doesn't own shares; his firm doesn't have an investment banking relationship.

The big question for AstraZeneca is whether Crestor can capitalize on recent favorable clinical trial news and shake off doubts among physicians in light of critics' efforts to have the drug banned or restricted. Crestor won crucial victories last month when the

FDA rejected a consumer group's request that the drug be banned and when the agency said the drug's side effects were similar to peer products. Although the Crestor label was revised, AstraZeneca avoided being hit with a strict black box warning that would have reduced Crestor sales.