Positive news from AstraZeneca.
The pharmaceuticals group has announced that an experimental biotech drug to treat asthma had performed well in two late-stage clinical trials. Benralizumab is likely to be submitted to US and EU regulators in the second half of 2016 and, if all goes well, come to market next year. AstraZeneca hopes it will compete strongly with existing treatments from the likes of GlaxoSmithKline and Teva.
The company has previously suggested Benralizumab could reach annual sales of around $2bn, which would give a real boost to its drugs portfolio. It had made the sales forecast as part of its defence against the unwanted takeover attempt by Pfizer.
The update has lifted AstraZeneca’s shares by 37p to £39.52, and analyst Brian White at Cantor Fitzgerald said in a buy note:
With the focus in respiratory moving towards the treatment of severe disease, we believe that AstraZeneca has a commendable effort targeting several distinct patient subtypes largely facilitated by the expertise at [its subsidiary] Medimmune. For example, despite GlaxoSmithKline’s lead time advantage with the approval of Nucala and other emerging competition, benralizumab has the potential to be a best in class therapy, we believe, targeting the IL-5 receptor resulting in a potent reduction in key inflammatory cells (eosinophils) in the treatment of severe asthma.
We believe that the prospects for the pipeline will only really begin to become clear from 2018 onwards and consequently we believe that this future potential is best captured using a discounted cash flow to reflect the value inherent in the pipeline...We initiate with a buy recommendation and a target price of 4700p.
Shore Capital’s Dr Tara Raveendran said:
Astrazeneca reported positive phase 3 data for benralizumab, its novel biologic for severe asthma. Benralizumab was well tolerated and met its primary endpoint in two pivotal phase 3 registrational trials (SIROCCO and CALIMA) and the data was consistent with that observed in previous trials. Full data will be presented at upcoming conferences... Benralizumab is also in development for chronic obstructive pulmonary disease, with phase 3 data expected in 2018. We have peak sales of around $900m, with launch in asthma in 2017.
