To overcome the impact of losing patent exclusivities and regulatory restrictions on the sale of certain products, AstraZeneca (AZN) is now focused on three therapeutic areas—respiratory, oncology, and cardiovascular and metabolic diseases.
If AstraZeneca’s focused strategy enables it to report a solid revenue performance, it may have a positive impact on the share prices of AstraZeneca as well as the Vanguard FTSE Developed Markets ETF (VEA). AstraZeneca makes up about 0.19% of VEA’s total portfolio holdings.
The above diagram shows how AstraZeneca’s three focus areas and established medicines segment for emerging markets could offset the negative revenue drivers. If successful, the company could pose strong competition to peers such as Pfizer (PFE), Novo Nordisk (NVO), and Merck & Co. (MRK).
New AstraZeneca developments
AstraZeneca posted YoY (year-over-year) revenue growth of about 6.0% in 2016 on a YTD (year-to-date) basis. In 4Q15, the company launched Tagrisso, which rose to prominence as a key lung cancer drug in 3Q16. Tagrisso has been reporting a greater demand than Iressa, the company’s leading lung cancer drug.
Lynparza, a poly (ADP-ribose) polymerase (or PARP) inhibitor, was approved by the FDA (U.S. Food and Drug Administration) on December 19, 2014, for BRCA-related (breast cancer–related) advanced ovarian cancer that has already been treated with three or more other therapies. On January 28, 2016, the drug received breakthrough therapy designation from the FDA as a treatment option for BRCA1/2 or ATM ((ataxia telangiectasia mutated) gene metastatic castration-resistant prostate cancer (or mCRPC) patients. Prior to using Lynparza, patients need to have received either one taxane-based chemotherapy or one new hormonal agent.
Farxiga has managed to maintain its dominance in the global SGLT2 (sodium/glucose cotransporter 2) class of diabetes drugs with a 42.0% share in total drug volumes sold.
AstraZeneca has also maintained its leadership position in emerging markets. The company is the second leading pharmaceutical company in China and the third in Russia.
In the next part, we’ll take a look at the growth prospects for Tagrisso.