Shares of London-based pharma giant, AstraZeneca plc (AZN - Free Report) have risen 13.4% this year so far, while the Zacks classified Large-Cap Pharma industry increased 6.4%. This comes after a decline of almost 20% in 2016.
AstraZeneca has a strong product portfolio and is one of the key players in the global cardiovascular market. However, many key drugs - Atacand, Toprol-XL, Seroquel and Merrem - are facing generic competition in the U.S. Lately, its core products, Crestor (cholesterol management) and Nexium (acid reflux management) are facing declining sales due to generic competition. Meanwhile, another key drug Symbicort (asthma) declined in 2016 due to significant pricing pressure on the ICS/LABA class from managed care as well as competition from outside the class, especially in COPD. AstraZeneca’s diabetes franchise also faces stiff competition.
However, AstraZeneca’s new drugs like Lynparza (ovarian cancer), Farxiga/Forxiga (type II diabetes) Movantik/Moventig (opioid-induced constipation) and Tagrisso (lung cancer) are off to an encouraging start. AstraZeneca is looking for further label expansions for these drugs. Trends of better diagnosis, improved access and favorable patient dynamics should bode well for the company’s established products across its portfolios. Meanwhile, the company is working on driving Brilinta (cardiovascular) sales which has been doing well. Brilinta enjoys a leading position in the U.S. branded oral anti-platelet market.
AstraZeneca is also working on bolstering its pipeline and is looking at suitable acquisitions. In addition to acquisitions, the company is pursuing co-development deals with companies like Nektar Therapeutics (NKTR - Free Report) , Eli Lilly & Company (LLY - Free Report) , Ionis, Allergan plc (AGN - Free Report) , Merck and Valeant to boost its pipeline
AstraZeneca has been making significant progress with its pipeline. The company has about 12 new molecular entities in phase III or under regulatory review and several lifecycle management programs. In 2017, the company expects to launch four new products – durvalumab (multiple cancers), Qtern (saxagliptin/Forxiga fixed combination; approved in the U.S & EU.), Bevespi (already launched) and benralizumab (asthma; under review in the U.S).
Meanwhile, this year so far has been news rich for AstraZeneca. In March, it announced positive Lynpraza data from a phase III study evaluating the drug as a maintenance monotherapy in patients with germline BRCA-mutated (gBRCA), platinum-sensitive, relapsed ovarian cancer. In February, AstraZeneca gained FDA approval for Qtern (diabetes) and also presented positive breast cancer data on Lynpraza. The company expects a lot of activity on the regulatory and pipeline front through the rest of the year including U.S. regulatory decisions for benralizumab and durvalumab (for urothelial carcinoma) andpivotal data for systemic lupus erythematosus candidate anifrolumab and for durvalumab from lung cancer studies.
If the decisions/data are positive, the share price uptick should continue.
AstraZeneca carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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