AstraZeneca share price: Berenberg remains bullish on pharmco

Analysts at Berenberg remain bullish on AstraZeneca, and have hiked their price target on the shares, following upbeat results from an oncology drug trial earlier this month. Oncology is one the drugmaker’s key therapy areas which are expected to help the company return to growth as its top-selling drugs continue to suffer pressure from cheaper generics.

AstraZeneca’s share price jumped in the previous session, adding 1.36 percent to close at 4,774.00p, outperforming the broader UK market, with the benchmark FTSE 100 index 0.30 percent higher at 7,275.25 points. The group’s shares have lost more than six percent of their value over the past year, but are up by some seven percent in the year-to-date.

Analysts at Berenberg reaffirmed AstraZeneca as a ‘buy’ yesterday, lifting their price target on the stock from 5,500p to 5,800p, following the Tagrisso trial results. Earlier this month, the company unveiled that results from a late-stage trial had showed that its drug osimertinib, marketed as Tagrisso, had ‘clear potential’ as a new standard of care in the first-line treatment of adult patients with locally-advanced or metastatic epidermal growth factor receptor (EGFR)-mutated non-small cell lung cancer (NSCLC). At the time, the blue-chip pharmco also posted upbeat results for another oncology treatment, Imfinzi.

“Following the publication of the Flaura trial, which tested Tagrisso in first-line lung cancer, we are revising our long-term forecasts,” the broker’s analyst Alistair Campbell said, as quoted by Citywire, adding that Berenberg now believed that “Tagrisso can reach sales of $5 billion by 2023, up from $3 billion previously”.

Campbell forecasts that AstraZeneca’s oncology franchise will grow to $11 billion in 2023 from $4.2 billion today “and it will become a much bigger contributor to sales” and “as a result it should have a positive impact on Astra’s margin structure”.

As of 08:22 BST, Wednesday, 20 September, AstraZeneca plc share price is 4,756.50p.