Why Pharma Giant AstraZeneca PLC (AZN)'s Market Value Gained $3.8 Billion Last Month
3/7/2017 5:50:29 AM
March 7, 2017
By Alex Keown, BioSpace.com Breaking News Staff
LONDON – AstraZeneca (AZN) shareholders saw gains of 5.4 percent over the month of February, driven primarily by the London-based company’s oncology programs.
And revenue from some key players in company’s oncology pipeline are only predicted to grow, an analysis by The Motley Fool’s Cory Renauer shows. Although AstraZeneca has seen sliding revenues from several of its drugs, Tagrisso, which was approved in April 2016, drew in $423 million in revenue. By 2022, oncology candidates durvalumab, tremelimumab and acalabrutinib are expected to generate $2.3 billion, $1.3 billion, and $968 million, respectively, Renauer said.
AstraZeneca has been on a quest to meet a revenue goal of $45 billion in sales by 2023.
There are some potential big revenue drivers on the horizon for the company, including cancer drug Lynparza. In February, the company announced Lynparza in tablet form met primary endpoints in a Phase III trial to treat patients with HER2-negative metastatic breast cancer harboring germline BRCA1 or BRCA2 mutations. Lynparza is a PARP inhibitor, a new class of cancer drugs. PARP stands for poly ADP ribose polymerase, which is an enzyme many cancer cells are more dependent upon than regular, healthy cells are. If approved for this type of breast cancer, Lynparza will be the first PARP inhibitor for that type of cancer. Lynparza has already been approved by the U.S. Food and Drug Administration for the treatment of one form of ovarian cancer. In 2016, the drug generated $218 million for AstraZeneca, the Telegraph of London reported. If the drug receives FDA approval for the breast cancer indication, analysts at Berenberg told the Telegraph that Lynparza could become a blockbuster treatment, generating $1 billion in revenue annually.
Despite that good news though, AstraZeneca will face an uphill battle this year to drive revenue growth. A few weeks before the Lynparza Phase III news was announced, the company said profit and revenue streams will likely fall in 2017 as generic drugs eat into the marketshare of its blockbuster anti-cholesterol drug Crestor. Renauer said there are some other challenges the company faces, including a challenge to durvalumab’s possible use for the treatment of bladder cancer. Renauer said Roche has a similar drug already on the market that is already becoming entrenched in that population.” There are also some questions about AstraZeneca’s Phase III MYSTIC trial for its first-line lung cancer treatment, he said. The primary endpoints have been restructured, which has made the trial a risky gamble for some investors, particularly since Bristol-Myers Squibb (BMY) already shuttered two similar trials, Renauer said.
And although AstraZeneca saw a nice bit of growth in its share price in February, Renauer suggested investors should hold off on acquiring additional shares until its oncology pipeline is more certain. Shares of AstraZeneca are trading at $29.24 as of 10:47 a.m.
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