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Oncology Segment: Another Growth Platform for AstraZeneca?

Mike Benson - Author
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Nov. 20 2020, Updated 12:11 p.m. ET

The oncology segment

The oncology segment is another key focus area of AstraZeneca (AZN). The oncology segment’s contribution increased from ~11.6% in 2014 to ~12.1% in 2015. The key products for oncology are Zoladex, Faslodex, and Iressa. To strengthen its oncology portfolio, AstraZeneca acquired Definiens in November 2014.

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Zoladex

Zoladex is a drug used for the treatment of prostate cancer in men, and breast cancer or endometriosis in women. Zoladex’s 2015 revenues increased 7% at constant exchange rates, following a growth of 29% in China’s sales.

Zoladex competes with drugs such as Enantone from Takeda Pharmaceutical (TYO) and Decapeptyl from Ipsen (IPN).

Faslodex

Faslodex is used for the treatment of postmenopausal women with advanced or metastatic breast cancer and for patients who have been treated with endocrine therapy. Faslodex’s 2015 revenues increased by 9% at constant exchange rates, following an increased demand in the United States as well as outside the US markets. Nearly 50% of revenues for Faslodex are reported from outside the US markets.

Faslodex competes with drugs such as Femara from Novartis (NVS) and Xeloda from Genentech, a Roche company (RHHBY).

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Iressa

Iressa is a drug used for the treatment of lung cancer. Iressa’s revenues declined by 2% at constant exchange rates in 2015, due to competition in Europe and lower sales in Japan, and partially offset by increased sales in emerging markets, China, and Latin America.

New oncology products

The new oncology products included in growth platforms are Lynparza and Tagrisso. Lynparza is a drug used for the treatment of ovarian cancer. Lynparza was launched in US markets in December 2014 and in 15 countries including France and Germany by the end of 2015. Lynparza was also designated a breakthrough therapy by the FDA (Food and Drug Administration) for the treatment of prostate cancer on January 28, 2016.

Tagrisso, a new drug for the treatment of metastatic non-small cell lung cancer, was approved during the fourth quarter of 2015. Tagrisso was launched in US markets in November 2015 and reported revenues of $19 million in 2015.

To divest company-specific risk, investors could consider ETFs such as the VanEck Vectors Pharmaceutical ETF (PPH), which holds ~4.5% of its total assets in AstraZeneca, or the First Trust Value Line Dividend ETF (FVD), which holds ~0.5% of its total assets in AstraZeneca and ~0.55% in AbbVie (ABBV).

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