The long-term growth story for AstraZeneca PLC beyond 2030 is increasingly focused on next-generation cell therapies and immune engagers, according to UBS, driving an increase to its price target and reiterated 'buy' rating.
Analyst Matthew Weston said the company and the wider sector face a "significant patent cliff" around 2030-and-beyond but argues the FTSE 100 drugmaker is well positioned to manage this with "sector leading replacement power".
One area of focus is its pipeline of assets, with the Swiss bank's analysis highlighting the R&D productivity at the Anglo-Swiss giant "consistently outperforming" large EU peers.
UBS points to blockbuster potential from several late stage assets: Enhertu (breast cancer), Imfinzi (immunotherapy), baxdrostat (hypertension), efzimfotase alfa (bone disorder), camizestrant (breast cancer) and AZD5004 (obesity).
"These should underpin the company's ambition to grow ahead of sector average late this decade," said Weston, estimating $17.2 billion of incremental total revenue potential in 2030E if current late-stage pipeline moves to 100% probability of success.
At December’s ASH medical conferences, AZ showed off promising early data for a dual targeting CAR-T therapy for multiple myeloma, which UBS believes the drug may have manufacturing advantages and a safety profile that could differentiate it in a competitive market. It estimates peak sales of $4 billion, up from $2.5 billion, and lifts its probability of success in myeloma to 60%.
Surovatamig, a T cell engager for B-cell lymphoma, is seen as “an emerging option”, with a “clear opportunity” in patients ineligible for CAR-T or previously treated with other therapies. UBS estimates peak sales of $1 billion and raises its probability of success to 60%.
Higher success probabilities and model updates lift UBS core earnings forecasts by about 3% for 2027-2030, underpinning the higher valuation, underpinning the higher valuation and new price target of 17,600p, up from 16,300p.