Successful results from late stage clinical trials for heart disease and diabetes drugs yesterday saw British pharmaceuticals giant Astrazeneca’s share price close at a new record high of £75.33. Over the course of Monday, Astra recorded a gain of 2.9%, or 215p, taking the share price return to just under 28% for the past year. The company is now valued at just shy of £100 billion.
Astrazeneca’s recent success is down to a string of positive clinical trial results for drugs in its pipeline. The latest two to be announced, catalysing Monday’s new gains, were for heart disease drug Brilinta and Farxiga, a diabetes drug. The former’s phase three trials demonstrated its effectiveness in helping patients with cardiovascular problems and type 2 diabetes when taken in combination with aspirin. The latter, also a stage three trial, reduced the risk of cardiovascular death, or deterioration of heart failure conditions, by 26%.
Astrazeneca’s three core therapy areas of focus are cardiovascular and metabolic disease, oncology and respiratory conditions. The company has existed in its present format since a 1999 merger between British pharmaceuticals company Zeneca and Sweden’s Astra.
Yesterday’s gains complete an impressive month for Astrazeneca, with several late-stage trials returning strong results. Drugs for pulmonary problems, lupus and heart conditions have all passed clinical trials with only on failure – a lung cancer drug. Yesterday’s upsurge takes share price gains to 19% since the end of July.
Excluding a dip between the springs of 2015 and 2016, Astrazeneca’s share price has been on a steady upwards trajectory since 2008. That bull run has seen the value at which the company’s stock changes hands rise from £17.90 in March 2008 to its £75.33 close yesterday. The growth in market capitalisation is vindication for the then divisive decision of chief executive Pascal Soriot to resolutely rebuff several takeover bids for Astrazeneca from U.S. giant Pfizer. The last, and final, offer made by Pfizer, tabled five years ago, valued Astrazeneca at £55 a share.
At the time, Soriot argued that Astrazeneca’s highly promising pipeline of new drugs in development meant that Pfizer was undervaluing the company. He projected that his company’s sales would be up 75% by 2024 – a target well on the way to be achieved, if not surpassed.
A number of analysts, including Deutsche Bank’s Richard Parkes, have lifted their target prices for Astrazeneca. Parkes commented for City A.M.:
“Recent financial results show that Astrazeneca has truly turned the corner on its expected return to growth and performance of its new drug portfolio is exceeding expectations”.
“Looking to the year end, we continue to expect the company to report extensive new data on its portfolio.”