AstraZeneca PLC’s (LON:AZN) recent tie-up with a Japanese drug developer could add billions to its top-line, according to analysts at Liberum.
Last week, the FTSE 100-pharma giant announced the UK’s biggest cash call so far this year, raising US$3.5bn to help fund its collaboration with Daiichi Sankyo.
The pair are working together to develop trastuzumab deruxtecan, a potential breakthrough treatment for HER-2 positive strains of cancer, such as certain forms of breast and gastric cancers.
READ: AstraZeneca launches UK’s biggest cash call to fund Japanese cancer deal
Trastuzumab deruxtecan isn’t approved for use yet, but the first regulatory submission is scheduled for later this year as a treatment for patients with advanced or hard-to-treat breast cancer.
City broker Liberum expects it to get the thumbs-up from regulators, after which analysts reckon it will go on to rack up billions of dollars in sales every year.
“We have looked at the sales potential of this drug in HER2+ cancers,” read a note to clients.
“It should be a blockbuster drug in its first indication, and has every chance of reaching US$3bn+ in sales globally.
“However, the real value in this deal will only be visible in earnings after 2023 when clinical trials open up larger patient populations.”
Liberum repeated its ‘hold’ recommendation but upped its price target to 6,400p.
In early morning trading, Astra shares were down 0.3% to 6,098p.