Shares in AstraZeneca (LON:AZN) have advanced in London this morning as the company announced that its hyperkalaemia drug had received approval in the US. The news comes after the Anglo-Swedish drugmaker updated investors on its first-quarter performance last week, posting a fall in revenue and earnings as it suffered from lower sales of its flagship cholesterol drug Crestor, which has been under pressure from cheaper generics, as well as a slump in externalisation revenue.
As of 10:28 BST, AstraZeneca’s share price had added 2.46 percent to 5,370.00p. The stock is outperforming the broader market rally which has seen the benchmark FTSE 100 index gain 0.86 percent to 7,845.76 points so far this morning.
Hyperkalaemia drug approval
AstraZeneca announced in a statement this morning that the US Food and Drug Administration (FDA) had approved its drug Lokelma, formerly ZS-9, for the treatment of adults with hyperkalaemia, a condition characterised by elevated potassium levels in the blood associated with cardiovascular, renal and metabolic diseases. The FDA green light comes after the European Commission granted marketing authorisation for Lokelma in the European Union in March.
The move marks a boost for the blue-chip pharmco which is betting on new therapies to return to growth, with generic drugs pressuring some of its top-selling treatments. Proactive Investors noted in its coverage of the news that AstraZeneca reckons it can generate peak sales in excess of $1 billion a year, with some analysts claiming that the total market is worth upwards of $6 billion.
Analysts on blue-chip pharmco
JPMorgan Chase, which sees AstraZeneca as a ‘buy,’ set a price target of 5,500p on the stock today, while Deutsche Bank reaffirmed the Anglo-Swedish drugmaker as a ‘buy,’ without specifying a valuation on the shares. According to MarketBeat, the blue-chip pharmco currently has a consensus ‘hold’ rating and an average price target of 5,283.77p.