Could AstraZeneca shares benefit from new cancer drug?

Over the weekend, AstraZeneca PLC unveiled positive trial data for its new breast cancer drug, which suggests it could be a game-changer for patients.

Experts say the drug antibody-based drug Enhertu could change the way in which breast cancer is treated.

Results demonstrated that the product doubled the progression-free survival rates of patients with late-stage breast cancer compared with chemotherapy treatment. The product was jointly developed with Japanese company Daiichi Sankyo.

In the trial of 550 patients, the drug reduced the risk of the disease progressing by 50%. It works by targeting hormone sensitive tumours known as HER2-targetable.

"Today's results represent a pivotal moment demonstrating the potential for Enhertu to redefine the treatment of HER2-targetable cancers,” said Susan Galbraith, executive vice president, Oncology R&D, at AstraZeneca.

“[The trial] validates targeting the lower end of the spectrum of HER2 expression, since Enhertu reduced the risk of disease progression or death across all types of patients in the trial by half and reduced the risk of death by over a third.

"We must now evolve the way we classify and treat metastatic breast cancer to ensure these patients are effectively diagnosed and treated."

AstraZeneca drug could be a ‘multi-blockbuster’

Breast cancer is now the most commonly diagnosed form of the disease across the world, recently overtaking lung cancer. Over two million cases were diagnosed in 2020 and almost 685,000 people died of the disease, according to AstraZeneca.

According to AstraZeneca, sales of Enhertu, excluding the Japanese market, were $426 million in 2021. However, the company thinks the product could become a “multi-blockbuster” as it could also be approved to treat other types of cancer, which are hormone sensitive, including certain types of lung cancer.

"As far as breast cancer goes, I'd say at least in the next few years, I'm pretty sure Enhertu is going to kind of finish revolutionising the treatment paradigm," Tara Hansen, a consultant at Informa Pharma Custom Intelligence, told Reuters.

Analysts at Jefferies expect peak global sales of $2.5 billion in breast cancer patients and a total of around $6.6 billion of peak sales in all cancer treatment indications.

Could AstraZeneca shares have further to run?

Shares in the drug giant dipped 2.89% to £101.44p on Monday – likely on profit-taking as the stock has performed strongly over the past few years. The drug giant has also benefited from strong sales of its Covid vaccine, although at the recent results management said that this fillip was set to wane.

The shares have risen 24% since last December and are trading near their five-year highs. However, there could be further mileage in them. Broker Berenberg recently set a price target of £120 for them and trading is expected to be strong this year, despite the waning of the Covid vaccine fillip. Investors can be forgiven for taking some profits, nevertheless.