It's confirmed: AstraZeneca's outperforming fourth-quarter results show it is indeed back on the growth track, thanks to cancer drugs Tagrisso and Lynparza—and once again, China.

The British drugmaker only just returned to sales growth in the third quarter of 2018 after years of decline and replenishing its pipeline with new products. Now, as CEO Pascal Soriot put it in a fourth-quarter briefing with analysts, "we move into a different phase where we expect sustained growth, and the question is not whether we’re going to grow, but at what pace."

The answer to a large part of that question will rest on the company's oncology drugs, as they together posted the largest sales jump in the fourth quarter across AZ’s therapy areas at 61%. Both EGFR lung cancer drugs Tagrisso and PARP inhibitor Lynparza about doubled their sales in 2018.

Benefiting from first-line approvals in non-small cell lung cancer, Tagrisso turned up $1.86 billion in 2018. Its fourth-quarter sales came in 5% above analysts’ expectations, according to Jefferies. With that momentum, AstraZeneca now anticipates the drug will surpass Symbicort and become its biggest-selling medicine in 2019.

"In the U.S., Tagrisso has now established itself as the clear standard of care in the front-line EGFR setting," Dave Fredrickson, AZ’s oncology head, said at the company’s fourth-quarter briefing with analysts.

Tagrisso saw sales of $347 million from emerging markets in 2018, with about half coming from China—in which AZ has boasted a strong presence compared with its Big Pharma peers. However, the fourth-quarter number in the region declined sequentially.

Fredrickson pegged the slide to the drug’s addition to China’s National Reimbursement Drug List, which it secured after offering a huge discount.

"But volume in terms of new starts and patients coming onto therapy was robust," he said. He insisted Tagrisso growth in China could carry into 2019 thanks to a higher prevalence of EGFR mutation in Asia-Pacific than in Western countries, plus an expected first-line approval in the first half of 2019.

Elsewhere in AZ’s oncology portfolio, Lynparza’s fourth-quarter sales of $209 million beat consensus by 9%, bringing the drug's 2018 total to $647 million. And immuno-oncology product Imfinzi’s $262 million in the fourth quarter came in 10% above expectations, according to Jefferies.

Lynparza maintained its leading position in the PARP class in terms of total prescription volumes, Fredrickson noted. And as AZ continues rolling out Lynparza as a second-line maintenance ovarian cancer drug, it also last month won FDA approval to treat patients who’ve just undergone an initial round of chemo, a market that Evercore ISI analyst Steve Breazzano has estimated could be worth at least $1.4 billion.

Imfinzi, still reeling from a high-profile failure in previously untreated lung cancer, has instead established itself a foothold in unresectable, stage III NSCLC. In the U.S., where about 90% of Imfinzi sales came from, roughly half of eligible patients are getting the drug, according to Fredrickson. AZ now expects the drug’s peak U.S. sales could reach beyond $1 billion.

Still, Soriot said he doesn’t want people to think of AZ as an oncology company. In fact, the biggest beat in the fourth quarter, 14%, came from asthma drug Fasenra, earning it a special mention from Soriot during the conference.

In its first full year on the market, the drug raked in $297 million.

"We beat everybody’s forecast with this product last year," Soriot said, adding that, "It was a remarkable launch."

Despite being the third IL-5 competitor to market, after GlaxoSmithKline’s Nucala and Teva’s Cinqair, Fasenra has become the preferred biologic in terms of U.S. new-to-brand prescription, and it’s also gradually catching up in total market share, Ruud Dobber, who became head of AZ’s BioPharmaceuticals commercial unit after a company reorganization in January, said at Thursday's conference.

And then there's China. The country again delivered double-digit growth for AstraZeneca in 2018, and Soriot said AZ’s profitability in the country is very similar to what it sees in Europe, even though big investments there contributed to a 17% slide in core operating profit last year.

China plays a large part in AZ’s strategy; thanks to the country, AZ’s emerging markets sales in 2018 came in higher than its U.S. sales did. The pharma giant in December also turned to China for the first nod for its FibroGen-partnered blockbuster potential roxadustat for chronic kidney disease patients on dialysis.

Consider the asthma and COPD drug Symbicort. Despite a 22% decline in the U.S. and a 10% decline in Europe, the drug saw sales jump 24% in China. Dobber said that kind of growth will continue into 2019, as Symbicort is the only ICS/LABA on China’s recently updated essential drug list. Its sister drug, Pulmicort, also generates 77%—or $995 million—of its total global sales in emerging markets, with China making up "the overwhelming majority."

All told, AZ’s product sales increased 4% in 2018, to $21.0 billion. Now that growth seems to have normalized, "2019 will be a year of focus on continued pipeline delivery and flawless commercial execution," Soriot said in a statement. The company is now guiding to high single-digit sales growth for the year, largely in line with analysts’ calculations.

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