By Deena Beasley
LOS ANGELES (Reuters) - After thwarting a $118 billion takeover approach from Pfizer Inc, Britain's AstraZeneca Plc will again take the spotlight this weekend when the biggest annual medical meeting for cancer doctors convenes in Chicago.
AstraZeneca will present clinical trial data for several of its highly-anticipated cancer therapies, including treatments that help the body's immune system fight the disease.
The experimental drugs were a focus of Pfizer's interest in a deal to boost its pipeline of new medicines, while AstraZeneca argued the offer from its U.S. rival amounted to an effort to buy them on the cheap. Pfizer walked away from the takeover effort on Monday, but can be invited back by AstraZeneca in three months, or make a new offer on its own in six months under UK rules.
Industry watchers see the new data due at the American Society of Clinical Oncology meeting as the next test of AstraZeneca's ability to remain independent. Several leading shareholders have already begun to agitate for AstraZeneca to reconsider engaging Pfizer, and any disappointing news on the cancer front could add to that pressure.
"Immuno-oncology has emerged as one of their (AstraZeneca's)most important pipeline assets," said Morningstar analyst Damien Conover, referring to drugs designed to boost the ability of the body's own immune system to fight cancer.
ISI Group analyst Mark Schoenebaum said both AstraZeneca shareholders and Pfizer itself will likely weigh the latest data as they consider the merits of a fresh takeover effort.
The ASCO meeting runs from May 30 to June 3. AstraZeneca will have early-stage trial data on MEDI4736, part of a closely-watched class of drugs known as anti-PDL1 therapies, which work by blocking a tumor's ability to evade the immune system's defenses. AstraZeneca acquired the drug in its 2007 takeover of U.S.-based MedImmune.
Potential competitors, including Merck & Co Inc, Roche Holding AG and Bristol-Myers Squibb, will also have data at ASCO for drugs with a similar mechanism. Roche's drug, MPDL3280A, came with the company's acquisition of Genentech in 2009, while Bristol's nivolumab was acquired in the company's buyout of Medarex, also in 2009. Merck's PD-1 agent was developed at Organon BioSciences, which the larger drugmaker picked up when it merged with Schering-Plough in 2009.
At an analyst meeting on Monday, AstraZeneca is expected to discuss results for a small number of patients enrolled in a trial of MEDI4736 in combination with tremelimumab, another experimental immune system-booster designed to work by blocking a different protein called CTLA-4.
AstraZeneca spokeswoman Ayesha Bharmal referred to the meeting as a "status update," with fuller data only expected in September during the European Society for Medical Oncology meeting in Madrid.
But Wall Street is eager for any signals of how well the AstraZeneca drug combination works. Earlier this month, investors were disappointed by data showing a combo of Bristol-Myers' nivolumab with its already approved drug Yervoy, a CTLA-4 blocker, yielded a lower-than-expected rate of response and a higher rate of toxic side effects for lung cancer patients.
Breakthroughs in cancer therapy, born of a better understanding of the molecular changes that fuel tumor growth, are improving treatment for many patients. Prices are also on the rise, fueling market valuations for drugmakers with the most promising new medicines. The average cost per prescription for cancer medication is now more than 22 times higher than in 1997, according to pharmacy benefit manager Express Scripts.
AstraZeneca Chief Executive Pascal Soriot, in making his case for rejecting Pfizer, issued an aggressive 10-year sales forecast, projecting sales would rise 75 percent to $45 billion by 2023. The long-term goals depend in large part on its cancer drugs delivering high returns.
But many questioned the company's robust outlook. Jefferies & Co called the 2023 forecast "overly optimistic," while Handelsbanken Capital Markets said its earnings model "only sees meager growth beyond 2017."
AstraZeneca will also present updated early-stage results for AZD9291, which targets a genetic mutation that helps tumors evade current treatments, and mid-stage data on olaparib, which blocks a cancer cell repair enzyme known as PARP, for ovarian cancer.
(Additional reporting by Bill Berkrot in New York and Ben Hirschler in London; Editing by Michele Gershberg and Nick Zieminski)
- Health Care Industry
- Mergers, Acquisitions & Takeovers
- AstraZeneca Plc
- Pfizer Inc