(Bloomberg) -- AstraZeneca Plc shares are on track for their biggest weekly decline since July 2023, after a disappointing update for the British drugmaker’s experimental lung cancer medicine with partner Daiichi Sankyo Co. prompted two analyst downgrades.
Following this week’s sell calls at Deutsche Bank AG and Nordea Bank Abp, AstraZeneca’s consensus rating — a proxy for the ratio of buy, hold, and sell ratings on its stock — fell to the lowest since February 2021, according to data compiled by Bloomberg.
Data this week from a late-stage trial showed that while experimental drug datopotamab deruxtecan, or Dato-DXd, helped some lung cancer patients in the trial live longer, the results across all patients weren’t statistically significant.
That raised concerns among analysts about the drug’s potential regulatory approval, including timeline expectations. AstraZeneca shares fell for a fourth straight session on Friday, their longest falling streak since May, and have dropped 6.9% so far this week.
It was challenging to accept that Dato-DXd “was not going to be the next breakthrough in lung cancer we had hoped last summer,” Deutsche Bank analyst Emmanuel Papadakis wrote in a note that downgraded his rating on the stock to sell from hold. He also reduced his price target to 10,500 pence, the lowest among analysts tracked by Bloomberg — suggesting a roughly 10% decline from current trading levels.
Chief Executive Officer Pascal Soriot, who has been at the helm of AstraZeneca since 2012, has won plaudits for boosting the stock price following Pfizer Inc.’s failed takeover attempt two years into his reign. But the growth outlook is looking increasingly challenging.
Analysts at Nordea cited the impending patent expiry in the US of its blockbuster Farxiga drug, pricing pressure in China and their belief that Dato-DXd “is not much better” than its main rival, Gilead Sciences Inc.’s Trodelvy.
After years of double-digit increases, “we believe that AstraZeneca will move into a new phase of slower growth,” Nordea analyst Viktor Sundberg wrote in a note that cut his recommendation to sell. “Growth is set to drop drastically going into 2025.”
--With assistance from James Cone.
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