AstraZeneca is missing out on the market rally after a disappointing trial result for one of its drugs.
The experimental antidepressant TC-5214 - a high risk, high reward project from Astra and US partner Targacept - failed to meet a key goal in a phase three study in Europe. Astra agreed to pay up to $1.24bn for rights to the drug in 2009, with an upfront payment of $200m. But this setback casts another potential shadow of Astra's drug pipeline. Navid Malik at Merchant Securities said:
We remain concerned over the strength of the AstraZeneca late-stage pipeline given the substantial generic risks the company faces and downgrades to Crestor and Brilinta.
But Panmure Gordon was more positive, keeping its buy recommendation and pointing out there had been positive news on guideline changes for Astra's Brilinta treatment. But on TC-5214, analyst Savvas Neophytou said:
Although it is never a good thing to fail phase three trials, it should be noted that the company had been doing a good job at managing expectations for this high risk project. This is evidenced by consensus forecasts, which shows peak sales expectations of $266m in 2016 (versus our forecast of $180m in 2016). It is not the end of the road for TC-5214, but to us the approach represented a very high risk venture because a new unproven brain target was utilised in trying to provide a new depression drug.
Astra shares are down 93.5p at £28.73.
Still with the fallers, BSkyB has dipped 1p to 740.5p after Berenberg began coverage of the satellite broadcaster with a sell rating.
