July 26, 2018 / 7:27 AM / a year ago

UPDATE 1-New drugs shine as AstraZeneca battles through generic losses

* New medicines prove themselves, offset Crestor hit

* On track for 2018 return to growth with better H2 seen

* Double-digit growth in emerging markets, led by China (Adds CEO comment, details on drug sales, shares)

By Ben Hirschler

LONDON, July 26 (Reuters) - AstraZeneca's new drugs performed strongly in the second quarter, offering a glimpse of better times ahead as the company struggles with falling sales of cholesterol fighter Crestor due to generic competition.

Cancer medicines were a highlight, including good demand for Imfinzi, following U.S. approval of the immunotherapy in early lung cancer, and Chief Executive Pascal Soriot said the company remained on track for a return to product sales growth in 2018.

China was also once again a bright spot, as AstraZeneca continues to outperform competitors in the world’s second biggest drugs market, and the UK drugmaker's shares rose 2 percent in early trade on Thursday as investors cheered the growing evidence of recovery.

AstraZeneca said that total revenue increased 2 percent in dollar terms in the second quarter to $5.16 billion, although core earnings per share, which exclude some items, fell 21 percent to 69 cents, reflecting investment behind new product launches.

Analysts, on average, had forecast earnings of 71 cents on revenue of $5.16 billion, Thomson Reuters data showed. For the full year, the company kept its financial guidance unchanged.

"The performance in the first half demonstrated that we remain firmly on track to return our company to product sales growth in 2018," Soriot said.

Drug sales in the three months rose 2 percent, helped by a weaker dollar, but were down 1 percent in constant currencies, which is the benchmark AstraZeneca uses for measuring its return to growth.

For 2018 as a whole, AstraZeneca expects a low single-digit percentage increase in product sales in constant currencies and core earnings per share of $3.30 to $3.50.

The drugmaker has suffered the industry's biggest patent cliff since 2012, wiping out more than half of its sales, but analysts' now believe it is poised for one of the sector's fastest growth rates in the coming years.

Key to this are new cancer pills Tagrisso and Lynparza, as well as the infused treatment Imfinzi, which has stolen a march on established immunotherapies from Merck, Bristol-Myers Squibb and Roche that are focused on advanced disease.

Following the U.S. green light for Imfinzi in February, the European Medicines Agency is also evaluating it in inoperable stage III lung cancer - where disease has not yet spread around the body - and could recommend it as early as this week here

Reporting by Ben Hirschler; Editing by Susan Fenton

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