AstraZeneca share value plummets following failed cancer drug tests
Drugs giant AstraZeneca saw its value nosedive by £7 billion, following flopped key long cancer treatment tests. The share price crash was the worst seen since the company’s formation in 1993.
Failed Tests And Share Price Turmoil
AstraZeneca braced itself for trouble following the announcement of poor results of a drug trial for a landmark lung cancer medication. The failed trial saw in excess of £10 billion wiped off the company’s market value and saw increasing speculation concerning the future of CEO, Pascal Soriot. To add to the drugs giant’s woes, the company’s vulnerability to takeovers is now at an all-time high.
The trialled drug, Imfinzi, was to have seen AstraZeneca securing a large chunk of the fast-growing IO drugs market, estimated to be worth around $8 billion today and estimated to reach in excess of $50 billion in the future.
AstraZeneca Live Chart; 5 Minute intervals
Following the announcement of the failed drugs trial, AstraZeneca shares closed down 16pc at £43, sending the company’s market value plunging to £54.2 billion. Although analysts acknowledge that AstraZeneca’s decreased value leaves it vulnerable to takeover, shareholders are hopeful that the UK government will be keen not to see such a major R&D and manufacturing business going abroad and will offer some protection.
UK Prime Minister, Theresa May, has already indicated that firms like AstraZeneca must not be taken over by foreign rival companies, because of their strategic value to the UK economy.
Alternative Drug Trial Hopes
AstraZeneca said that Imfinzi did still offer the potential for huge earnings, despite the disappointing trial results. This announcement comes on the back of the approval it received for use of the drug in bladder cancer patients in the United States. In addition, there have been more positive results seen in a different subset of patients treated with the lung cancer drug during a trial. As a consequence, Infinzi is still being used in a dozen ongoing clinical trials.
AstraZeneca have also revealed that they have recently signed an $8.5 billion deal with American drugs firm, Merck, working to find commercial opportunities for its cancer drug Lynparza. Positive results have also been published on another cancer drug, Tagrisso.