Positive News for AstraZeneca

Zacks Equity Research

Good news flowed in at AstraZeneca (AZN) with the American College of Cardiology Foundation (ACCFF) and American Heart Association (:AHA) panel of experts updating their guidelines and issuing a class 1 recommendation for Brilinta (ticagrelor). The class 1 recommendation was issued for the use of Brilinta in invasively managed patients suffering from ST-elevation myocardial infarction (:STEMI).

In July 2012, Brilinta received a class 1 recommendation for invasively and non-invasively managed patients suffering from unstable angina (UA) or non–ST-elevation myocardial infarction (:NSTEMI) in updated ACCF/AHA guidelines.

We note that anti-platelet Brilinta has received the highest recommendation issued by the guidelines committee. We believe that this will encourage physicians to prescribe Brilinta and provide a much needed boost to Brilinta sales.

Brilinta is approved for reducing the rate of heart attack and cardiovascular (:CV) events in adult patients with acute coronary syndrome (:ACS), including UA, NSTEMI and STEMI.

Brilinta was approved in the US in July 2011. However, Brilinta sales have been lackluster so far. Brilinta sales amounted to $24 million in the third quarter of 2012 compared with $18 million in the second quarter of 2012.

Neutral on AstraZeneca

We are encouraged by the company’s focus on high-potential emerging markets and are pleased with its effort to drive the bottom line through cost-cutting initiatives and share buybacks.

However, we remain concerned about the generic competition faced by the company’s key products. In 2011, the company lost revenues worth almost $2 billion to generic competition. The weak late-stage pipeline coupled with the slow Brilinta uptake also bothers us.

Currently, we have a Neutral stance on AstraZeneca in the long run. The stock carries a Zacks #3 Rank (Hold) in the short run.

Large-cap pharma stocks currently holding a Zacks #2 Rank include companies like Novo-Nordisk (NVO).

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