- Astra stock has declined due to patent expirations and generic competition.
- Astra revenues are likely to continue to decline.
- However, Astra has an extremely high potential pipeline of oncology drugs.
- Moreover, Astra maintains a solid financial position.
- I believe that Astra is poised for a rebound in 2016, and that a well-time investment in Astra could prove lucrative as a result.
Cancer remains one of the major causes of death in the developed world. One in four people are expected to die from the disease, and half of us must face up to suffering from some form of cancer during our lives.
Yet hopes for a cure – or at least a better chance of recovery – have emerged from an American cancer conference.
Hailed as a once-in-a-generation advance in treatment, so-called immunotherapies aim to harness the patient’s own immune system to help fight cancer.
Its is good news for patients. The developments also have the potential to give a major boost to Britain’s quoted pharmaceutical companies. And it couldn’t have come at a better time for FTSE 100-listed AstraZeneca.
A central plank of the company’s strategy is to develop novel combinations of drugs that target the escape mechanisms cancers use to evade the body’s immune system.
Oncology – cancer treatment – is a key therapeutic area in which Astra has expertise and which it hopes could transform the business.
By 2020 the group is aiming to bring six new cancer medicines to patients, focusing on ovarian, lung, breast and blood cancers.
Last year when Astra was fighting off a predatory £69billion bid from US rival Pfizer, chief executive Pascal Soriot warned that one of the costs of combining the two firms could be delays to its development pipeline of potential cancer treatments.
Since the deal collapsed, investors have been waiting for Astra’s share price to come nearer to the £55-a-share Pfizer offer. Soriot remains under pressure to justify the board’s rejection of the deal. Immunotherapy, therefore, could be the answer.
Decision Resources Group analyst Khurram Nawaz said: ‘Cancer immunotherapy is one of the most exciting fields of research in oncology, and successful drug development in this space offers a highly lucrative opportunity for drug developers.’