AstraZeneca, a leading biopharmaceutical company, has caught the attention of investors with its robust pipeline of therapies that extend beyond the realm of oncology. Jefferies analyst Peter Welford recently upgraded the stock to a buy rating from hold, highlighting the potential that many investors have overlooked. With an increased price target on U.S.-listed shares of $80, Welford suggests a potential 18% upside from the current closing price of $67.83. In this article, we will examine the untapped potential that lies within AstraZeneca’s pipeline and the implications for investors.
One significant area that the consensus seems to be missing out on is the late-stage cardio and respiratory pipeline assets that AstraZeneca possesses. Welford specifically mentions Airsupra, tozorakimab, and eplontersen as assets with substantial upside potential. These assets can drive earnings and sales approximately 8% higher than current consensus estimates, providing a notable boost to AstraZeneca’s bottom line.
A respiratory therapy that stands out is Airsupra, an asthma medication set to launch in 2024. Despite being relatively underappreciated, Airsupra holds tremendous promise as a “blockbuster rescue inhaler.” A proprietary physician survey conducted by AstraZeneca indicates that Airsupra has higher awareness and market penetration potential, leading to approximately $1 billion in additional sales. Welford describes Airsupra as a “de-risked asset,” highlighting its stability and likelihood of success in the market.
Another asset that seems to be flying under the radar is AstraZeneca’s tozorakimab, a drug designed for chronic obstructive pulmonary disease. Welford believes that this drug has the potential to reach peak sales of $4.5 billion, a significant figure that investors may have overlooked in their evaluations. With a sizeable market for chronic obstructive pulmonary disease treatments, tozorakimab could become a valuable revenue generator for AstraZeneca in the coming years.
One more asset that deserves attention is AstraZeneca’s eplontersen, a drug aimed at treating hereditary transthyretin-mediated amyloid polyneuropathy. With a suggested sales potential of up to $3.5 billion, eplontersen represents a significant opportunity for AstraZeneca. As the company continues to innovate and develop treatments for various diseases, eplontersen could become a valuable addition to its portfolio, generating substantial revenue in the process.
In addition to its cardiac and respiratory pipeline assets, AstraZeneca is also positioning itself as a frontrunner in breast cancer treatments. Jefferies highlights Enhertu therapy, a breast cancer treatment being jointly developed with Japan’s Daiichi Sankyo, as a potential standard-of-care. Forecasts suggest that Enhertu has the potential to reach impressive sales figures of $14 billion, a substantial opportunity for AstraZeneca and its investors. Furthermore, AstraZeneca’s experimental precision drug, datopotamab deruxtecan, also shows promise in slowing the progression of a common type of breast cancer. These advancements in breast cancer treatments demonstrate AstraZeneca’s commitment to addressing critical medical needs.
Of course, no investment opportunity is without risks. Welford highlights several areas of uncertainty surrounding AstraZeneca, including upcoming lung cancer data and the departure of the company’s CEO, Pascal Soriot. These factors could introduce downside risks that investors should carefully consider when evaluating their investment decisions.
Despite the potential risks and uncertainties, AstraZeneca’s expanding pipeline offers a compelling opportunity for investors. With overlooked assets in cardiorespiratory therapies and advancements in breast cancer treatments, the company’s potential for growth is significant. As investors begin to recognize the untapped potential within AstraZeneca’s pipeline, the stock could experience a significant upward trajectory. With Jefferies’ buy rating and increased price target, now may be the time to consider investing in AstraZeneca and capitalizing on its promising future.