AstraZeneca’s shares spike on a surprise coup in PhIII lung cancer data

Sean Bohen, AstraZeneca

AstraZeneca $AZN shares popped more than 7% this morning on positive Phase III progression-free survival data for Imfinzi (durvalumab) in treating advanced, inoperable and chemo-resistant non-small cell lung cancer.

Analysts did a quick double take and immediately cheered it as a remarkable – and completely unexpected – hit.

That’s the right target for AstraZeneca, which recently won its first approval for the world’s fifth checkpoint inhibitor. On Wednesday Merck moved to the front of that field with an approval to use a combination of Keytruda with chemo as a first-line therapy on NSCLC, putting it on top of the heap of rivals looking to carve out a big piece of the blockbuster market.

This AstraZeneca trial wasn’t the big study analysts have been waiting for.

AstraZeneca has been betting heavily on MYSTIC, using a combination of durvalumab and the CTLA-4 drug tremelimumab for NSCLC. That would create some major market opportunities for the pharma giant, which has been making a rep for itself in the oncology field in recent years — even as it’s plagued by pratfalls and disappointments in other areas of R&D.

AstraZeneca badly needs every shred of good news that it can find, and there were some high fives in the organization on this positive readout, which helps the company distinguish itself in the most intensely competitive field in biopharma.

Seamus Fernandez, Leerink

Seamus Fernandez at Leerink gave it a big thumbs up, noting:

This news comes as an early upside surprise, as we do not currently have forecasts for this indication in our model nor do we believe this opportunity is widely appreciated by investors. Importantly, this puts AZN squarely in the IO fight in with a unique NSCLC indication for monotherapy PD1/PDL1 agents not currently shared by other members of the class. AZN estimates that it is at least 2-3 years ahead of other competitors, and our searches only uncovered relatively small single-arm Ph 2 studies underway for potential competitors.

Other analysts at Deutsche Bank were also impressed, offering some blockbuster numbers for AstraZeneca on this one indication.

Look for the data to make the short trip to regulators as AstraZeneca seeks to capitalize on forecasts that this drug could be worth more than $2 billion a year for the company.

Said R&D chief Sean Bohen:

We look forward to working with regulatory authorities around the world to bring Imfinzi to lung cancer patients as soon as possible. Alongside this, we continue to explore Imfinzi’s full potential as monotherapy as well as in combination with tremelimumab and other medicines in areas of continued unmet need across multiple types of cancer.

At a time when the checkpoint cancer market would seem to be ripe for maturing, with 5 approved, there’s instead been a series of startling reversals and advances. Bristol-Myers Squibb made the move to the lead, then blew it with a badly designed Phase III on frontline use. Merck leapfrogged its rival and then, just days ago, Roche’s Tecentriq failed a confirmatory Phase III in bladder cancer, after it had been given an accelerated approval.

Big surprises are becoming the order of the day in checkpoint inhibition, a field worth tens of billions of dollars.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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