AstraZeneca, a leading pharmaceutical company, has been making notable strides beyond its successful oncology portfolio. Jefferies analyst Peter Welford believes that investors should not overlook the company’s robust pipeline of therapies in the cardio and respiratory space. In fact, Welford recently upgraded the stock from hold to buy and raised the price target on U.S.-listed shares from $66.50 to $80, indicating a potential 18% upside.
Welford highlights several late-stage cardio and respiratory pipeline assets that could offer significant upside optionality for AstraZeneca. One such asset is Airsupra, an asthma therapy that has the potential to be a “blockbuster rescue inhaler.” A proprietary physician survey conducted by the company suggests higher awareness and market penetration for Airsupra, indicating the potential for approximately $1 billion more in sales. Welford describes Airsupra as a “de-risked asset” and expects its launch in 2024.
Another promising asset in AstraZeneca’s pipeline is tozorakimab, a drug for chronic obstructive pulmonary disease. According to Jefferies, tozorakimab has the potential to reach peak sales of $4.5 billion. Additionally, AstraZeneca’s eplontersen, a drug aimed at treating hereditary transthyretin-mediated amyloid polyneuropathy, could generate up to $3.5 billion in sales.
AstraZeneca is also poised to become a frontrunner in breast cancer treatments. The company’s Enhertu therapy, developed in collaboration with Japan’s Daiichi Sankyo, is rapidly gaining traction as a breast cancer standard-of-care and is projected to reach $14 billion in sales. Furthermore, AstraZeneca’s experimental precision drug datopotamab deruxtecan, also being developed in partnership with Daiichi Sankyo, recently showed promise in slowing the progression of a common type of breast cancer in a late-stage trial. The positive results from the trial have further bolstered the prospects of AstraZeneca’s breast cancer therapies.
Despite the potential for growth and success, AstraZeneca is not without risks and uncertainties. Welford cautions about the upcoming lung cancer data, which could introduce a level of volatility for the company. Furthermore, the impending departure of CEO Pascal Soriot raises concerns about leadership stability. It is essential for investors to consider these potential downsides when evaluating their investment decisions.
AstraZeneca’s stock performance has been moderate, with a 5.2% decline in the current quarter and minimal gains of less than 0.1% for the year. However, the news of the company’s expanding pipeline and promising developments in breast cancer treatments has sparked renewed interest. As a result, the stock rose by more than 1% in premarket trading on Monday.
AstraZeneca’s diverse pipeline of therapies beyond oncology presents substantial opportunities for investors. The company’s investments in cardio and respiratory treatments, along with its emerging dominance in breast cancer therapies, demonstrate its commitment to addressing critical medical needs. While there are risks to consider, the potential upside of overlooked assets and promising clinical trials suggests a positive outlook for AstraZeneca’s future.