Deutsche Bank reckons AstraZeneca PLC (LON:AZN) has stolen a march on its competitors following the “positive results” from its phase III PACIFIC lung cancer trial last week.
On Friday, UK-based Astra told investors that data from the trial had showed that its Imfinzi drug reduced the risk of a patient’s lung cancer worsening or causing death.
AstraZeneca was famously late to the PD-1/ PD-L1 scene – a class of proteins that scientists think could suppress the immune system during events such as cancer – but Deutsche Bank thinks last week’s news now gives its immuno-oncology franchise a “significant lead” over its competitors.
“Combined with our forecasts for Tagrisso (2022E US$2.3bn), it will allow AZN to build a compelling lung cancer franchise overcoming the disadvantage of its late entrance in the PD-1/PD-L1 class,” said analyst Richard Parkes.
“Importantly, we believe the PACIFIC study's early readout suggests a meaningful benefit and the lack of alternatives for patients with locally advanced lung cancer should ensure approval.”
‘Start of return to strong growth’
Astra has been hit by several of its big-name drugs going off-patent in recent years which has impacted revenues, but Parkes reckons the progress of its IO platform could see the firm return to strong growth.
German banking giant Deutsche reckons Imfinzi will “conservatively” add at least US$1bn a year in peak sales from the treatment of locally advanced lung cancer, with that figure potentially rising upwards of US$3bn.
Parkes has hiked his price target to £57 (from £53.50) as he reiterated his ‘buy’ rating.
No read-across to pivotal MYSTIC trial, says HSBC
Shares in Astra have rocketed more than 10% over the past couple of trading days since the PACIFIC results were announced.
Much of this is likely to do with the perceived knock-on effect this could have on Astra’s key MYSTIC phase III lung cancer trial.
READ MORE: AstraZeneca, Merck and Bristol Myers all vying for dominance in lung cancer market
In this study, Imfinzi is being tested in combination with tremelimumab – a treatment which is seen as high-risk by the markets but one that, should it come off, could be a game changer for the company and the industry as a whole.
With Imfinzi coming up trumps in the PACIFIC readout, many thought it had served to boost the chances of Astra getting MYSTIC across the line.
But that’s not the case according to analysts at HSBC, who don’t think there is any read-across between the two trials.
“While some investors may take the positive data from Imfinzi in the second line setting as a proxy for what may happen in the first line setting, we would urge caution given that what had been expected from IO drugs (Opdivo in first line lung cancer, Tecentriq in second line bladder cancer) does not always provide a guide to results in other settings,” said analyst Steve McGarry.
Imfinzi is ‘too expensive’
The data from the PACIFIC study showed Imfinzi had benefits on a progression-free survival end-point where patients had already been treated with cisplatin and radiotherapy but their disease had not progressed.
According to McGarry, this is a potential stumbling block.
“If a patient has been through two rounds of cisplatin chemotherapy (which is toxic) plus radiotherapy – the standard of care – and their disease has progressed, we can rationalise why a patient may get treated with a US$150,000 drug,” said the analyst.
“However, it is more difficult to rationalise treating a patient with a drug costing this much when their disease has not progressed after two rounds of chemotherapy and radiotherapy.”
“Why would oncologists not use one of the other IO drugs already approved for patients who have progressed, since that is an occurrence that may be judged to be likely anyway?”
McGarry repeated his ‘reduce’ recommendation for the stock as well as his £42 price target.
AstraZeneca shares gained 52p, or 1%, on Monday morning to £52.28.