AstraZeneca in £20bn hit after heart disease drug hoped to be a potential blockbuster
More than £20billion was wiped off the value of AstraZeneca yesterday after a bruising setback in a trial for a potential blockbuster drug.
The pharmaceutical giant’s shares tumbled 10.5 per cent in early trading – slashing its value by £23billion – before closing down 6.2 per cent, or 886p, at an eight-month low of 13,354p.
The slump came after it said its Wainua drug, which it is developing with US firm Ionis, failed to reduce deaths related to heart disease.
A successful trial – something Astra is known for – would probably have generated billions of pounds in extra sales.
The failure marked a major disappointment for the Anglo-Swedish firm and its boss Pascal Soriot as well as investors, and comes after US regulators rejected a breast cancer drug in May.
The stock hit a record high of 15,730p in February, valuing it at £244billion.
Trial blow: Astrazeneca’s shares tumbled 10.5% after it said its Wainua drug – which it is developing with US firm Ionis – failed to reduce deaths related to heart disease
Last night it was worth £206billion, making it the second-biggest company on the London stock market behind HSBC, which is valued at £250billion.
Astra is counting on up to 20 drug launches to help generate £60billion in annual revenues by 2030.
Chris Beauchamp, chief market analyst at IG, said: ‘Today’s news is a major blow. Given the expected revenue benefits from this drug will not materialise for the foreseeable future, ambitious targets for 2030 now look under serious threat.’
Neil Wilson, investor strategist at Saxo, said: ‘Astra has many more irons in the fire but this is a disappointment after US regulators delayed approval for a cancer drug.’
The trial looked at treating a condition called transthyretin-mediated amyloid cardiomyopathy, which affects an estimated 300,000 to 500,000 people worldwide, according to Astra.
Wainua suppresses the production of abnormal proteins in the liver, which can affect tissues elsewhere in the body.
Sharon Barr, Astra’s executive vice-president of biopharmaceuticals research and development, said that the trial was ‘designed to examine the role of Wainua, a gene silencer treatment, on top of today’s standard of care in reducing recurring cardiovascular events and mortality’.
She added: ‘Although the trial did not meet its primary objective, we believe the results support greater scientific understanding of treatment approaches for the hundreds of thousands of patients suffering from this progressive and often fatal condition.’
Astra has become a cancer drug powerhouse and is known for robust clinical trials which rarely deliver negative results.
Michael Leuchten, an analyst at Jefferies, said that ‘given AstraZeneca is meant to be able to design trials that are mostly watertight’ the share price fall might go beyond the potential loss of revenue.
‘The bigger issue is probably a degree of credibility loss,’ he said.
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