AstraZeneca share price: Company to justify turning down Pfizer in Chicago

on May 31, 2014
Updated: Jun 1, 2022

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins., Saturday, May 31: AstraZeneca Plc (LON:AZN) is taking the spotlight again this weekend with the company expected to present clinical trial data for several of its highly-anticipated cancer therapies at world’s largest cancer conference currently taking place in Chicago.

AstraZeneca has been under pressure to prove that it was right in snubbing the near-£70 billion takeover approach from US pharma giant Pfizer (NYSE:PFE) having built its successful defence around its pipeline of lucrative new drugs.
AstraZeneca’s share price closed 0.1 percent lower at 4,283.5p in London yesterday.
**Oncology pipeline spotlight**

Nearly a week after winning its battle with Pfizer, AstraZeneca is due to showcase several new treatments at the 50th Annual Meeting of the American Society of Clinical Oncology (ASCO) which kicked off in Chicago yesterday.
The Anglo-Swedish pharma company earlier this month released preliminary data ahead of the ASCO conference in an attempt to demonstrate that Pfizer’s offer – £50-per-share at the time – substantially undervalued the company. (AstraZeneca share price: Group unveils cancer drug data amid Pfizer fight) AstraZeneca has promised to present data from more than 40 scientific studies in Chicago, including an early-stage trial of its investigational lung cancer drug AZD9291, which targets a genetic mutation helping tumours evade existing treatments.

The Guardian yesterday quoted UBS analysts as saying in a note that the results were from a large study, “which makes this a much more robust signal of efficacy” than results reported by AstraZeneca’s US rival Clovis Oncology for a similar drug. UBS added that the results should substantially increase confidence in a filing for regulatory approval in late 2015 and launch of the compound in 2016.

AstraZeneca is also expected to provide details about another prospective compound, MEDI4736, part of a class of drugs known as anti-PDL1 therapies, which work by blocking a tumour’s ability to avoid detection by the immune system. The investigational drug is initially tested as a treatment for a type of lung cancer but has the potential to be used on a broader range of tumours.

The Financial Times, however, has quoted analysts as warning that AstraZeneca is facing fierce competition for MEDI4736 by Roche, Merck and Bristol-Myers Squibb which are working on similar treatments.
AstraZeneca’s oncology pipeline was cited as one of the main appeals for Pfizer in trying to secure a tie-up with the Anglo-Swedish group. Coincidentally, it was also one of the main arguments of AstraZeneca’s chief executive during hearings of two UK parliamentary committees which wanted to discuss the business and scientific consequences of a potential merger. AstraZeneca’s CEO Pascal Soriot argued that Pfizer’s proposal risked disrupting the FTSE 100 company’s research and delaying getting life-saving new drugs to market.
**Investor pressure**
Even though Pfizer walked away empty-handed on Monday, this only marks a temporary victory given that the US pharma group can return with a higher offer after three months if approached by AstraZeneca.
The Anglo-Swedish company’s biggest investor BlackRock Inc (NYSE:BLK), which is also one of Pfizer’s top five shareholders, has already signalled that it wants fresh negotiations to see if the offer could be improved as early as this summer. (AstraZeneca share price: Top shareholder pushes for resumption of Pfizer talks) To further complicate matters, AstraZeneca’s share price took a hit after Pfizer’s final offer expired although the FTSE 100 company’s shares are still trading at a premium to their price of £37.82 before Pfizer’s bid interest surfaced last month.
Other investors, however, have supported AstraZeneca’s right to move on. Martin Gilbert, the chief executive of Aberdeen Asset Management (LON:ADN), recently told The Times that it would be “disturbing” should the company not be allowed to “get on” if a merger were not agreed.
**On May 30, buy AstraZeneca shares at 4,299.00p.**
**On May 30, sell AstraZeneca shares at 4,296.50p.**


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