Drug firm stock falls despite big profit gain: AstraZeneca's earnings rose 40% in the quarter. Investors were not happy when it said 2006 results would be flat.

Byline: Thomas Ginsberg

Feb. 3--Cash-rich drugmaker AstraZeneca P.L.C. posted a 40 percent increase in quarterly profit and boosted its dividend yesterday. But investors sent the stock tumbling on disappointing projections.

AstraZeneca, based in London with U.S. headquarters near Wilmington, offered a flat outlook for 2006 based on a potential hit to its $1.7 billion sales from Toprol-XL, the top-selling beta-blocker heart drug used for high blood pressure.

On Jan. 17, a federal judge invalidated AstraZeneca's patents on Toprol-XL, clearing the way for cheaper generics. It then was hit with a class-action petition in federal court demanding AstraZeneca compensate patients for years of charging excess prices over generics.

AstraZeneca insisted that its Toprol-XL patents were "valid and enforceable" and that its "enforcement of its patents did not violate antitrust laws."

In a call with investors, chief financial officer Jonathan Symonds said "the potential entry of a generic competition to Toprol represents the swing factor" in earnings projections.

AstraZeneca officials would not discuss the odds of cutting a deal with generic makers to market an "authorized" generic Toprol, which might mitigate the revenue loss.