UBS has reiterated its 'buy' rating on AstraZeneca PLC (LSE:AZN) with a 12-month price target of 14,200p, offering potential upside of just over 30% from the current share price of 10,907p.
The focus is on two high-profile drug candidates with contrasting outlooks.
The more promising is baxdrostat, AstraZeneca’s treatment for resistant hypertension. The Phase 3 BaxHTN trial is due to report results in the third quarter.
UBS believes the drug has a good chance of success, drawing confidence from encouraging data in the BrigHTN study and strong results from a rival product.
UBS has raised its peak sales estimate for baxdrostat to $4bn, up from $3bn, and sees scope for significant upgrades to consensus forecasts if the data are positive.
The picture is less upbeat for Dato-DXd, branded as Datroway, which is being trialled in the AVANZAR study for first-line non-small cell lung cancer.
UBS remains cautious, citing mixed data in later-line studies and warning against reading too much into early biomarker results.
The bank believes current forecasts of $3bn to $4bn in peak sales are achievable without a major contribution from AVANZAR, supported instead by indications such as EGFR-mutant lung cancer and breast cancer.
These two readouts, expected in the second half of 2025, are seen by UBS as important milestones in assessing AstraZeneca’s ambition to hit $80bn in annual revenue by 2030.
UBS currently models around $75.5bn, based on 5% drug sales growth and 6% total revenue growth through to the end of the decade.
UBS assigns a 58% probability of $4bn peak sales for baxdrostat, contributing 1.1% to its net present value model. For Dato-DXd in the AVANZAR trial, the assigned probability is 25%, contributing 0.8%.
Overall, UBS sees AstraZeneca as well-positioned with meaningful catalysts ahead.
The bigger potential driver in 2025 is clearly in cardiovascular, not oncology. While the market already reflects much of the AVANZAR story, BaxHTN could surprise to the upside.
The shares were up 58p at 10,964p.