When Pascal Soriot presented encouraging half-year results last month, the chief executive of Astrazeneca primed the markets to expect an “intense news flow” about the company’s pipeline of drugs during the rest of the year (Alex Ralph writes). He has been as good as his word.
A relentless series of late-stage trial results and regulatory approvals have helped to replenish a medicines cabinet ravaged by expiring patents for old blockbusters, returning the company to annual product sales growth for the first time since 2009 — and there was a double dose of good news for investors and patients yesterday, which briefly pushed Astra’s shares to record highs.
The pharmaceuticals group announced positive results from an eagerly anticipated late-stage trial of Lynparza, one of its most promising new cancer drugs, as well as a fast-track regulatory review in the United States of another oncology treatment.
The Paola-1 study of women with advanced ovarian cancer compared Astra’s Lynparza combined with Avastin, which is owned by the rival Roche, of Switzerland, with Avastin on its own. The trial was as a first-line maintenance treatment and was regardless of whether patients possessed a particular gene mutation, known as BRCA. The study met its primary goal of “statistically significant” and “clinically meaningful” improvement in progression-free survival, increasing the time women lived without the disease progressing.
Astra has been developing Lynparza, one of a series of potential blockbuster oncology drugs, in collaboration with Merck, the American giant, after an agreement in July 2017 that is worth up to $8.5 billion to Astra.
Lynparza has been approved in 64 countries for ovarian cancer and as a treatment for breast cancer in 43 countries. The drug generated $520 million of product sales in the first half of the year, doubling on a constant currency basis, putting it among Astra’s top ten medicines and representing about 12.8 per cent of $4.1 billion of oncology portfolio sales in the first half and 4.6 per cent of its $11.2 billion overall product sales.
Ovarian cancer is the eighth most common cause of death from cancer in women, with almost 300,000 new cases diagnosed last year and about 185,000 deaths. Astra has been seeking to develop its potential further in other tumour types.
The significance of the Paola-1 trial was heightened last month when the turnaround of the pharmaceuticals division of Glaxosmithkline, Astra’s FTSE 100 rival, was bolstered by encouraging results from its Prima trial of Zejula, which is also a first-line maintenance treatment for ovarian cancer patients.
The second positive announcement in Astra’s oncology pipeline came from the US, where the Food and Drug Administration granted Calquence, its blood cancer treatment, a “breakthrough therapy designation” for chronic lymphocytic leukaemia, one of the most common types of adult leukaemia. The fast-track process accelerates the development and regulatory review of new medicines that are intended to treat a serious condition and that have shown encouraging early clinical results. Astra has received ten breakthrough therapy designations since 2014.
With further trial results expected and topline growth estimated to show up on the bottom line, Astra shares hit an intra-day high of £74.72 yesterday (though they fell back to close 73p, or 1 per cent, down at £72.69). The stock’s 23 per cent gains this year further vindicate Mr Soriot’s decision to rebuff a £55-a-share bid from Pfizer five years ago.
ADVICE Hold
WHY Pipeline of new medicines set to feed through to bottom line and to cut its leverage
ITV
Across the world the traditional television industry is racing to keep up with the pace of change (Callum Jones writes). Predicting the precise path ahead for Britain’s biggest commercial broadcaster is about as easy as guessing who will win Love Island or The X Factor during a series opener; that there will be bumps along the way is perhaps as certain as a Piers Morgan rant on Good Morning Britain.
Yet ITV is approaching a turning point as those in charge of the business seek to transform it into an empire fit for the digital age. Before the end of the year, Britbox — a £5.99-a-month streaming service — will be launched in the UK. This venture with the BBC, pitched as a British rival to Netflix and Amazon Prime, will offer viewers both classic programmes and new commissions. As lead partner, ITV plans to invest at least £65 million in Britbox UK during its first two years. Since setting up shop in America in 2017, the platform has attracted more than 650,000 subscribers.
In Britain, it is unclear how much demand there is for another such service. Netflix has signed up 11.47 million households in the UK, Amazon has 5.96 million and Sky’s Now TV has 1.62 million. ITV has found domestic success in the premium on-demand space; its advert-free Hub+ has more than 500,000 subscribers — but, as Apple and Disney wait in the wings, the market is getting crowded.
The broadcaster’s reliance on advertising has diminished. ITV Studios — which produces and distributes shows for its own channels, such as The Voice, and others, like Poldark on BBC One — generated revenues of £758 million in the six months to June 30.
Over the same period, its total advertising sales fell by 5 per cent to £849 million. Propping them up must have been a driving factor behind doubling the regularity of Love Island, the hit dating series, starting next year.
Takeover chatter now feels older than Coronation Street. As shares flirt with six-year lows, investors appear to have concluded that the soap’s storylines are more believable than the prospect of a prime-time swoop.
ADVICE Avoid
WHY Propects for new streaming service unclear amid sluggish advertising
