AstraZeneca Takeover Chatter Bubbles Up Again After Massive Drug Trial Disappointment

AstraZeneca Takeover Chatter Bubbles Up Again After Massive Drug Trial Disappointment

"While the results from the MYSTIC trial for progression free survival in first-line Stage IV non-small cell lung cancer compared with standard of care are disappointing, the trial was created to assess overall survival and we look forward to evaluating the remaining primary endpoints of overall survival for both mono- and combination therapy", said Executive Vice President, Global Medicines Development and Chief Medical Officer Sean Bohen.

AstraZeneca along with its global biologics R&D research arm MedImmune announced that their immune-oncology combo-treatment for non-small cell lung cancer, or NSCLC, did not meet the primary endpoint in a late-stage study.

Imfinzi on its own as a monotherapy wouldn't have worked either, Astra said, although it was never formally tested.

AstraZeneca's top line has been shrinking for several years as its historic best-sellers such as cholesterol-lowering pill Crestor lose patent protection, allowing cheap copycats to enter the market.

"While the results from the MYSTIC trial for progression free survival in first-line stage IV non-small cell lung cancer compared with standard of care are disappointing, the trial was created to assess overall survival and we look forward to evaluating the remaining primary endpoints of overall survival for both mono- and combination therapy", said chief medical officer Sean Bohen. Results are expected in the first half of next year.

Profit for the second quarter was US$477 million compared with a loss of US$3 million a year earlier as the company reined in costs. The pharmco's core earnings per share meanwhile climbed six percent to $0.87. The trial is looking at Imfinzi's effectiveness as a treatment for metastatic non-small cell lung cancer both as a standalone drug and in combination with another monoclonal antibody.

The company kept its interim dividend of 90.0 cents per share unchanged.

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Ahead of today's announcements analysts had warned AstraZeneca had "become a one trial company" due to its reliance on the Mystic readout.

Franklin has the drugmaker as a "buy" with a (perhaps optimistic) target price of £55. The company also notes that the drug wasn't tested for, but would have missed, a secondary endpoint of Imfinzi monotherapy reaching a certain level for progression-free survival compared to platinum-based standard-of-care.

Despite the big disappointment with MYSTIC, there was some better news with FLAURA, another Phase III lung cancer trial.

Analysts reckon Tagrisso could have peak sales in excess of US$3bn a year.

The pharmaceutical giant also announced it had agreed a multi-billion-dollar deal to develop and commercialise another cancer drug, Lynparza, with rival Merck. If all conditions of the partnership are met, Merck will pay AstraZeneca as much as $8.5 billion.

AZ's chief executive Pascal Soriot urged patience on MYSTIC this morning, saying the trial "continues as planned to evaluate overall survival", adding that the company's financial performance is in line with expectations and asserting that AZ has "continued pipeline momentum".

Shares lost 15.7% at the open to £43.11.

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