AstraZeneca shares have been surging in the wake of the Brexit breakup vote, and some boosters of the UK pharma giant are interpreting the rally as a sign of renewed hope in its pipeline rather than just a bit of speculation on some thin rumors about a potential takeover bid by Novartis.
AstraZeneca investor Daniel Mahony, a fund manager at Polar Capital LLP, had this to tell Bloomberg:
Astra is showing a bit of leg this year because of pipeline missteps by others. It wouldn’t surprise me if the shares move up more from here. The pipeline is coming into view.’
That particular misstep he’s referring to is Bristol-Myers’ epic fail on its Phase III lung cancer study for Opdivo, which immediately benefited rival Merck and its checkpoint inhibitor Keytruda.
AstraZeneca has a late-stage study of its own checkpoint in lung cancer, called MYSTIC, and a readout for durvalumab in early 2017 could set the stage for a first-line move. According to clinicaltrials.gov, the study compares durvalumab with or without the CTLA-4-targeting tremelimumab against the standard of care in a first-line setting, and it’s due to deliver data in January.
AstraZeneca, though, has been a late-comer to the whole checkpoint inhibition market. Some months ago it warned that it would take a methodical approach to studying durvalumab, which is in a long lineup of trials. Roche has already followed up with a checkpoint approval, and an alliance of Pfizer and Merck KGaA may make it to the fourth spot ahead of AstraZeneca.
In addition, AstraZeneca had to acknowledge another setback for its cancer pipeline – Pascal Soriot’s prime hope for delivering big gains in revenue – this week with the second Phase III failure for one-time blockbuster hopeful selumetinib. And tremelimumab failed as a solo drug against mesothelioma at the end of February.
While a prospective fifth-place market finish may sound unenviable to the average biopharma observer, AstraZeneca’s core investors say there’s lots to be bullish about. And Mystic may make all the difference.
“There’s a huge amount of potential pipeline value riding on the outcome of that clinical trial,” Dani Saurymper, manager of the AXA Framlington Health Funds in London, tells the business news service. “Novartis would be taking on significant risk if they were to pursue an acquisition of AstraZeneca prior to the announcement of those clinical trial results.”
If Novartis is actually thinking about it at all.
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