AstraZeneca share price: Drugmaker loses ground in oncology compound race

on Mar 20, 2015
Updated: Oct 21, 2019

AstraZeneca Plc (LON:AZN) has seen its shares on unstable ground today following the news that the company is trailing the competition when it comes to its experimental drugs program.

Following a failed $117 billion takeover attempt by US pharmaceutical giant Pfizer Inc. (LON:NYSE:PFE) last year, AstraZeneca informed investors that they could generate $45 billion in sales by 2023 thanks to its research and development of immune therapies for cancer. However, according to a report by Goldman Sachs Group Inc., the company is falling behind three of its competitors.
Bristol-Myers Squibb Co. (NYSE:BMY) already received authorisation to sell its Opdivo drug on March 04. Meanwhile, the formulation of AstraZeneca’s rival drug, MEDI4736, is still in trials and it’s looking likely that the compound won’t be submitted to US regulators until next year. Nicholas Turner, an analyst at Mirabaud Securities LLP in London, recommends selling AstraZeneca shares, stating that a company releasing a drug behind three others has no real ground to compete on.
Turner went on to suggest that if AstraZeneca is unable to show any revenue progress, the shares could fall to a position where the company becomes vulnerable to another takeover bid. While AstraZeneca CEO Pascal Soriot successfully fended off the takeover bid from Pfizer Inc., without solid sales of the MEDI4736 drug, the chances of him being able to survive another raid are slim.
Esra Erkal-Paler, a spokeswoman for AstraZeneca said that the company is making significant progress and is confident that long-term revenue goals will be met. Last year, oncology drugs generated 12 percent of company sales.
And while some analysts believe that AstraZeneca’s immune-oncology sector is somewhat under-appreciated, Turner still thinks that the company will have issues reaching its 2023 target, citing that two of its biggest selling drugs, Nexium and Crestor are now faced with declining sales as they lose patent protection.
As of 14:37 GMT, Friday, 20 March, AstraZeneca plc share price is 4,835.50p.

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