AstraZeneca Faces Major Setback Over Cancer Drugs
July 27 2017 - 3:55AM
Dow Jones News
By Denise Roland
AstraZeneca PLC said a combination of two of its new oncology
drugs failed to shrink lung cancer tumors in a closely watched
clinical trial, casting doubt on a central part of the company's
ambitious growth plans.
The trial, dubbed Mystic, centered on the combination of two
immuno-oncology drugs, which are designed to boost the immune
system's ability to eradicate cancer cells. AstraZeneca said the
combination was no better than standard chemotherapy at shrinking
tumors in advanced lung cancer.
AstraZeneca shares fell 15% in early trading in London.
AstraZeneca Chief Executive Pascal Soriot has long touted the
combination approach as a competitive edge that could help it take
on market leaders Merck & Co. and Bristol-Myers Squibb Co.
The company's success in immuno-oncology is key to its long-term
goal of nearly doubling revenue by 2023, a target that was revealed
to fend off an unwanted, and ultimately failed, takeover approach
by Pfizer Inc. in 2014.
Dr. Soriot faces analysts later Thursday amid uncertainty about
his own tenure at the helm after an Israeli paper reported he was
jumping ship to take the top job at Israeli drug firm Teva
Pharmaceuticals. Since then, Astra repeatedly has declined to
comment on Dr. Soriot's long-term intentions.
This latest setback will sow fresh worry about the company's
ability to meet its revenue goal, despite a string of successes in
other clinical trials earlier this year that had shored up
confidence in the company's cancer pipeline.
Sean Bohen, who leads drug development at AstraZeneca, said that
while the initial results were disappointing, the company will
discover next year whether the combination prolonged overall
survival. It is possible for a treatment to extend overall survival
without improving progression-free survival because it may do so
without shrinking tumors.
The results from clinical trial came as AstraZeneca said it
swung to a net profit in the second quarter, due to lower spending
on research and marketing, proceeds from several licensing deals,
and a favorable year-earlier comparison. However revenue fell as
sales of new drugs struggled to offset the decline of older best
sellers.
The company posted net profit of $477 million, compared with a
net loss of $3 million a year earlier, when AstraZeneca took a
restructuring charge related to job cuts. Revenue dropped 10% to
$5.05 billion. Analysts had expected net profit of $450 million on
revenue of $5.05 billion.
AstraZeneca's top line has been shrinking for several years as
its historic best sellers like the cholesterol-lowering pill
Crestor lost patent protection, allowing cheap copycats to enter
the market. Mr. Soriot has told investors that 2017 will be the
year when sales bottom out.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
July 27, 2017 03:40 ET (07:40 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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