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AstraZeneca

AstraZeneca nears £100bn market cap as remarkable drug pipeline turnaround continues

Only five years ago, AstraZeneca’s Symbicort inhaler generated more sales than all of the firm’s cancer drugs combined. The same can’t be said any more…

AstraZeneca - AstraZeneca nears £100bn market cap as remarkable drug pipeline turnaround continues
Lung cancer drug Tagrisso is now AstraZeneca’s biggest seller

Barely a day seems to go by without AstraZeneca PLC (LON:AZN) telling its shareholders that one of its drugs has breezed through another clinical trial.

Its diabetes blockbuster, Farxiga, is the latest to come out of a key study on top, showing that it can help to reduce the risk of death from heart attack.

READ: AstraZeneca pumps higher as Farxiga shows benefit in late-stage heart-failure study

That was today. Last week, Lynparza impressed in a late-stage ovarian cancer trial, while Tagrisso improved survival rates in certain lung cancer patients.

In fact, since the beginning of July, there have been no fewer than 17 drug updates, listing everything from trial results through to regulatory approvals.

It’s a far cry from where Astra was only a few years ago. Back then, the FTSE 100 drugmaker was one of the sector’s least loved stocks as it battled falling sales of some of its blockbusters which had lost their patents, namely Crestor (statin) and Seroquel (bipolar).

To make things worse, it had a dearth of new drugs coming through to plug the gaps left behind.

Take a bow, Pascal Soriot

But under chief executive Pascal Soriot, who joined in August 2012, the Anglo-Swedish company has re-energised its pipeline and it now has more than 150 clinical trials in progress.

Since his arrival, Soriot has shifted the business towards the lucrative oncology market, hiving off numerous drugs that he felt didn’t fit with the picture.

Lung cancer treatment Tagrisso has proved to be an unquestionable success and is now the company’s best-selling drug. In the opening six months of this year alone, it racked up sales of almost US$1.5bn.

Cancer focus paying off

That takes it above Astra’s Symbicort inhaler, which only five years ago outsold all of the company’s cancer drugs combined.

Recent data showed that previously untreated patients who took Tagrisso lived for longer than those who used rival drugs Tarceva or Iressa (also Astra’s).

While it is beating all-comers as a first-line treatment, AstraZeneca wants to expand its use and is testing Tagrisso as a post-surgical treatment to prevent the return of the disease. Phase III trials are also underway to examine the drug’s potential as a maintenance therapy following chemotherapy.

Another of Astra’s cancer drugs is Lynparza, which had been dumped by the company at one point before Soriot brought it back into the fold.

It is a PARP inhibitor which stops cancer cells from repairing themselves and has also made steady progress, albeit not quite as much as Tagrisso with first-half sales of ‘just’ US$520mln.

The treatment is currently used in certain ovarian and breast cancer patients, and in June, it showed promise in treating notoriously hard-to-treat pancreatic cancers.

Now worth comfortably more than GSK

It’s not just oncology where Astra has turned itself around. There are dozens of trials in respiratory and cardiovascular health – the company’s two other ‘core’ areas – as well as in other diseases such as lupus, Alzheimer’s and Parkinson’s.

Investors look to be happy with the company’s turnaround, given that the share price recently hit an all-time high of over 7,500p.  

The company is currently valued at just shy of £100bn, £15bn more than its long-time rival, GlaxoSmithKline PLC (LON:GSK).

Quick facts: AstraZeneca

Price: £71.09

Market: LSE
Market Cap: £93.3 billion
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