It was the news that the markets have been waiting for, but unfortunately for AstraZeneca PLC (LON:AZN) investors the much-hyped MYSTIC lung cancer trial suffered a serious setback this morning.
The Phase III study – which is looking at how two of its lead IO drugs, Imfinzi and tremelimumab, work together in non-small-cell lung cancer patients – failed to meet the primary endpoint of improving progression-free survival compared to chemotherapy – the current standard of care.
READ MORE: Astra, Bristol-Myers and Merck vying for dominance in lung cancer market
Astra has tried to play this down by saying that the real focus should be on the overall survival data due out early next year, but this is still a hammer blow for a treatment that was seen by many as the answer to many of the drugmaker’s current issues.
Imfinzi on its own as a monotherapy wouldn’t have worked either, Astra said, although it was never formally tested.
“While the results from the MYSTIC trial for progression free survival in first-line stage IV non-small cell lung cancer compared with standard of care are disappointing, the trial was designed to assess overall survival and we look forward to evaluating the remaining primary endpoints of overall survival for both mono- and combination therapy,” said chief medical officer Sean Bohen.
The trial will continue to assess the two additional primary endpoints of overall survival for Imfinzi monotherapy and the Imfinzi-treme combo. Final OS data from those endpoints are expected in the first half of 2018.
Results a sideshow
Given that the focus around AstraZeneca is on its pipeline, the first half results played second fiddle this morning.
As has been the case for a while now, Astra’s revenues fell once again in the first six months in 2017 as its top line continues to be ravaged by the loss of patents on blockbusters like its Crestor cholesterol pill.
Despite income from several disposals and external deals, revenues slipped 9% (at constant exchange rates) to US$10.46bn.
However, the Anglo-Swedish pharma group slashed its costs during the period which meant pre-tax profits came in more than 50% higher than the same period last year at US$1.07bn. Reported earnings per share increased by 41% (at constant currency) to US$0.80.
As for dividend, that remained unchanged at US$0.90 (68.9p) a share as Astra repeated its full-year guidance.
Still a ‘buy’, says City broker
“AstraZeneca was always a risky proposition short term and this result is the pretty much the worst case for MYSTIC with the study failing at PFS even in the selected 25%+ PDL1 patient group for both the combination and single agent,” said Liberum analyst Roger Franklin.
“The shares would have been (and may well still be) down mid-teens on this news although there is some mitigation from the success today also of the important Tagrisso FLAURA study in 1L lung cancer.”
Franklin has the drugmaker as a ‘buy’ with a (perhaps optimistic) target price of £55.
Strong FLAURA results, collaboration with Merck
Despite the big disappointment with MYSTIC, there was some better news with FLAURA, another Phase III lung cancer trial.
The study found that Astra’s Tagrisso drug shoed a “clinically meaningful progression-free survival benefit” compared to the current standard of care treatment.
“The strong results from the FLAURA trial are very exciting news for patients with EGFR mutation-positive non-small cell lung cancer, providing physicians with a potential new first-line treatment option to improve outcomes in this disease,” added Bohen.
Analysts reckon Tagrisso could have peak sales in excess of US$3bn a year.
There was also a strategic collaboration with fellow pharma giant Merck & Co Inc (NYSE:MRK) which will see the two work together to develop new cancer treatments based around Astra’s Lynparza drug.
Chief executive Pascal Soriot said the tie-up would maximise the potential of Lynparza as a “backbone for many combinations”.
AstraZeneca will net US$1.6bn from Merck upfront and the overall figure could reach as high as US$8.5bn subject to certain milestones.
Shares lost 15.7% at the open to £43.11.
--Updates for results, broker comment and share price--