AZ points to potential in cancer at strategy update

AstraZeneca (AZ) predicted yesterday that its “industry-leading” cancer portfolio would account for a quarter of its revenues in 2023 and is now considered its sixth growth platform.

Just six months ago – whilst fending off an unwanted takeover offer from Pfizer – AZ was talking about just five platforms, namely its respiratory and diabetes portfolios, antithrombotic Brilinta/Brilique (ticagrelor), Japan and emerging markets.

The company’s chief executive Pascal Soriot told investors in yesterday’s strategy update call that at the time it was too early to make such claims for the portfolio, but a lot has happened in the interim, particularly in the buoyant immuno-oncology sector.

AZ now has 13 combination immuno-oncology trials already underway with another 16 at the planning stages, and it intends to bring six new cancer medicines to market by 2020.

Making a quarter of its revenues in cancer in 2023 – equivalent to around $11 billion – would be a significant evolution for AZ, marking a fundamental shift in its business away from a focus on primary care in recent years.

While cancer drugs already accounted for around 12 per cent of revenues in the first nine months of the year, most are mature and seeing overall sales start to decline, despite some expansion in emerging markets.

Soriot said it would have been premature to label the portfolio as a growth platform before now. However, with key events, such as the expected approvals of Lynparza (olaparib) in the US and EU for ovarian cancer in the coming months and the earlier-then-expected filing of much-anticipated non-small cell lung cancer (NSCLC) candidate AZD9291 in the first half of 2015, the time is now right to elevate its status.

“The submission next year will make AZD9291 the fastest development programme in anticancer history”

The submission next year will make AZD9291 the fastest development programme in anticancer history – from first-in-man trials to filing in less than two-and-a-half years, he noted. At its last strategy update in May – whilst in the throes of its defence against the £69 billion hostile takeover bid from Pfizer – AZ said it expected AZD9291 to eventually reach $3 billion in annual sales.

AZ also highlighted its PD-L1-tageting antibody MEDI4736, which was billed as a $6.5 billion product back in May despite being a late-entrant in the anti-PD-1/PD-L1 space after rival drugs such as Bristol-Myers Squibb’s Opdivo (nivolumab) and Merck & Co’s Keytruda (pembrolizumab).

In fact, MEDI4726 is the “first-mover” in a number of cancer indications, said Soriot, who noted that there is an emerging consensus among analysts that immuno-oncology will emerge as a “mainstay” of cancer treatment in years to come, representing a market of between $20 billion and $40 billion.

The focus of other R&D areas where AZ has a history – notably neuroscience and anti-infectives – will be more on partnerships and collaborations, such as its alliance with Eli Lilly on Alzheimer’s candidate AZD3293.

“It is our intention to create value out of these programmes, even if we don’t do the work completely ourselves,” said Soriot.

Reversal of fortune?

Discussing the company’s future in broader terms, Soriot noted that in 2012 “many investors said we were in decline and would be a $20 billion company by 2020.

“Today, the debate is about whether we can be a $45 billion company in 2023,” he added, saying AZ will now enter a “second phase” of its recovery between 2015 and 2017.

While the company still faces challenges with patent expiries on some big-selling brands such as gastrointestinal therapy Nexium (esomeprazole) and lipid-lowerer Crestor (rosuvastatin), “the trough will not be as deep as once thought” thanks to AZ’s efforts to invigorate its business over the last two years, and he now expects 2017 sales to be in line with 2013 levels.

“With 14 drugs in phase III trials or registration, the company could have 8-10 new approvals in the 2015-2016 timeframe”

“We have the pipeline that will enable us to achieve this,” said Soriot, noting that with 14 drugs in phase III trials or registration, the company could have 8-10 new approvals in the 2015-2016 timeframe. Meanwhile, the new Cambridge campus will be “transformational” as a means of expanding AZ’s ability to attract top scientific talent and partner on early-stage R&D projects.

While the pipeline is a key driver, other changes in the company are helping to deliver AZ’s promises, he said.

“The power of focus is quite incredible,” he told investors, pointing to the improvements in the performance of asthma and chronic obstructive pulmonary disease (COPD) therapy Symbicort (budesonide and formoterol) since the decision was taken to boost the commercial effort behind the brand.

Despite a tougher competitive environment Symbicort grew 12 per cent in the first nine months of the year and rose by more than a quarter in the US.

AZ is also striking a good balance between emerging and established markets, said Luke Miels, AZ’s executive vice president for global portfolio and product strategy and corporate affairs.

The company is now number two in the Chinese market – with 20 per cent-plus growth in recent quarters – and is seeing growth rates in emerging markets outside China also expanding at or above high single digits, driven by diabetes therapy Forxiga (dapagliflozin), Symbicort and Crestor.

The opportunity in respiratory and diabetes is huge in emerging markets, he pointed out, noting that COPD, for example, affects some 300 million people worldwide with the highest prevalence in developing countries such as China and Russia.

Investors asked how these opportunities could be unlocked quickly and Soriot noted that, in some cases, this could be achieved through very simple measures, such as making sure doctors and clinics have access to tools such as spirometry to help diagnose asthma and COPD.

Meanwhile, in Japan it was noted that AZ lay outside the top 10 pharma companies in 2012 but is now ranked eighth thanks to the continued strength of brands such as Nexium and Crestor.

Japan is also expected to be a key market for AZD9291 as many Japanese NSCLC patients carry a genetic mutation targeted by the drug.

“We are building a sustainable, more durable and profitable company,” said Soriot.

“The tangible results being delivered reinforce our confidence that we will achieve our target of delivering revenues of over $45bn by 2023.”

About the author:

Pharmaphorum’s staff reporter has many years’ experience writing on pharma and health topics.

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