- Lung cancer drug results fall short of expectations
- Shares fall to two month low
- Premium valuation to the sector
AstraZeneca (AZN) shares were bottom of the blue chip FTSE 100 on Monday, dropping 5.6% to £106.45 after disappointing trial results for its lung cancer antibody drug datapotamab deruxtecan which is being jointly developed with Daiichi Sankyo.
The company said: ‘While the primary endpoint of progression free survival was met the dual primary endpoint of overall survival did not meet the ‘prespecified threshold for statistical significance at this interim analysis.’
Shares in AstraZeneca trade at a valuation premium to the pharmaceutical sector with a forward 2024 PE (price to earnings) ratio of 16.5 times according to Shore Capital’s Sean Conroy.
This premium is predicated on AstraZeneca delivering higher growth from its drug development pipeline, so any disappointment can have a detrimental impact on the shares which are down around 14% over the last two months.
GREAT EXPECTATIONS
Conroy highlights high market expectations ahead of today’s readout with some analysts touting peak worldwide sales above $10 billion a year.
‘Data from TROPION-Lung01 have been eagerly awaited and we generally expect this result to be viewed positively, albeit in the absence of this being described as “clinically meaningful” and the safety events noted we would like to see data in detail before drawing any firm conclusions.’
‘The big picture view is that datapotamab deruxtecan could potentially replace mainstay, systemic chemotherapy. TROP2 is a protein commonly expressing on at range of cancers (including lung and breast).’ Added Conroy.
AstraZeneca said there were ‘some’ incidences of Grade 5 events, which refers to deaths.
Executive vice president at AstraZeneca Susan Galbraith commented: ‘With TROPION-Lung01, we met the dual primary endpoint of progression-free survival, challenging the entrenched standard of care in a previously treated and unselected patient population that has long deserved an alternative to chemotherapy.
‘These first Phase III trial results from the datopotamab deruxtecan clinical programme provide compelling evidence for the potential role this TROP2-directed antibody drug conjugate can play in treating patients with lung cancer.’
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