AstraZeneca maintains Citi ‘buy’ rating despite mixed pipeline updates Proactive uses images sourced from Shutterstock
AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) has retained a ‘buy’ rating from Citi following a mixed set of pipeline updates, with the broker saying its underlying investment thesis remains unchanged and that the drugmaker continues to offer the strongest growth and pipeline profile in the sector.
Citi highlighted positive results from the Phase III SAFFRON trial, where Tagrisso plus Orpathys met the primary endpoint and demonstrated statistically significant and clinically meaningful progression-free survival and overall survival benefits against platinum-doublet chemotherapy in second-line EGFR-mutated, MET-driven non-small cell lung cancer.
The broker models around US$500 million in peak sales from SAFFRON, equivalent to roughly 0.2% NPV upside, but said that estimate could prove conservative if the combination extends the duration of Tagrisso treatment.
AstraZeneca also reported that DESTINY-Lung04, evaluating Enhertu in first-line HER2-mutated non-small cell lung cancer, met its primary endpoint. Citi described the result as a modest positive and forecasts approximately US$145 million in peak sales.
Offsetting these developments, AstraZeneca discontinued the phase III eVOLVE-Lung02 study of volrustomig in first-line metastatic NSCLC patients with PD-L1 below 50%.
Citi had attributed around US$750 million of peak sales to the programme, with a 25% probability of success, implying approximately 1% NPV downside.
However, other phase III volrustomig studies in cervical cancer, head and neck cancer and mesothelioma remain underway, providing potential offset not currently included in Citi’s model.