Back to top

Analyst Blog

Generic competition has been adversely impacting AstraZeneca’s (AZN - Analyst Report) revenues over the past few quarters. This has put significant pressure on the company. The company is working on bolstering its pipeline. It is also looking at suitable acquisitions and deals.

In a bid to add late-stage candidates to its pipeline, AstraZeneca entered into a number of acquisition deals (Pearl Therapeutics and Omthera Pharmaceuticals) in the last few months and agreements with companies such as FibroGen, Inc.

In Jun 2012, AstraZeneca completed the acquisition of Ardea Biosciences, Inc. for approximately $1.26 billion or $32 per share. This acquisition added lesinurad (phase III), which is being developed as a chronic treatment of gout, to AstraZeneca’s pipeline. The U.S. and EU regulatory filings for lesinurad are planned for the first half of 2014.

Currently, the most commonly used treatment to lower blood uric acid levels in gout is allopurinol. Allopurinol, recommended at daily doses between 100mg to 900mg, is available in the market for more than 50 years. Meanwhile, data from a large, multinational, 6-month, open, prospective observational study (n = 1,735), LASSO (Long-term Allopurinol Safety Study evaluating Outcomes in gout patients) on allopurinol was presented by AstraZeneca.

The study evaluated the safety and efficacy of different doses of allopurinol. No new safety issues associated with the use of allopurinol (approximately 300mg/day) were observed. It was also found that approximately 43% of patients receiving allopurinol achieved the desired serum uric acid level at the time of the last dose.

The data from the LASSO study hints that most patients do not respond adequately to allopurinol treatment. This leaves the field open to new therapies in the gout market. We believe lesinurad, if cleared by regulatory authorities, has the potential to generate multi-million dollars and provide a much needed boost to AstraZeneca’s top line.

AstraZeneca presently carries a Zacks Rank #3 (Hold). Companies that currently look attractive include Isis Pharmaceuticals, Inc. (ISIS - Analyst Report), Johnson & Johnson (JNJ - Analyst Report) and Bayer (BAYRY - Analyst Report). While Isis Pharma is a Zacks Rank #1 (Strong Buy) stock, Johnson & Johnson and Bayer are Zacks Rank #2 (Buy) stocks.

Please login to Zacks.com or register to post a comment.