UBS is optimistic the potential for AstraZeneca PLC's (LSE:AZN) blood pressure drug, baxdrostat.
The Anglo-Swedish drugs giant developing baxdrostat as part of a new class of treatments called aldosterone synthase inhibitors (ASIs). These drugs aim to lower blood pressure by reducing aldosterone, a hormone that regulates salt and water balance in the body.
UBS, which reaffirmed a 'buy' rating with a 12-month price target of 14,200p, sees strong commercial potential, estimating peak sales of over $5 billion if successful.
The optimism follows encouraging results from a rival drug, lorundrostat, developed by Mineralys.
Lorundrostat showed promising blood pressure reductions in trials, and UBS believes this strengthens the case for baxdrostat. The bank expects AstraZeneca’s own phase III results in the second half of 2025.
Despite some mixed early data, UBS argues that baxdrostat has a good shot at success.
The bank highlights that a previous trial, BrigHTN, demonstrated strong blood pressure reductions, which bodes well for the upcoming results. However, one earlier study, HALO, did not meet its primary goal, raising some uncertainty.
UBS notes that AstraZeneca’s commercial reach and potential combination therapies could give baxdrostat an edge over competitors. The bank values the drug at 57p per share, which is a small fraction of AZ's overall valuation but still meaningful.
With strong projected revenue growth and expanding profit margins, UBS remains bullish on AstraZeneca’s broader business. The company is expected to generate nearly $55 billion in sales this year, with earnings per share rising to $6.93.
The stock was up 0.4% at 11,528p.