AstraZeneca Earnings: In-Line Results; Dato-DXd Repositioned; Fair Value Estimate Unchanged

Wide-moat AstraZeneca’s third-quarter results were in line with our expectations. Regarding its pipeline candidate Dato-DXd (TROP2 antibody-drug conjugate), AstraZeneca announced the withdrawal of its US application for second-line lung cancer, but also announced the submission of its application in EGFR-mutated lung cancer with the hopes of receiving accelerated approval. We maintain our fair value estimates of GBX 12,400 per ordinary share and $78 per ADR. Although we recognize that uncertainty surrounding its China business may weigh on shares in the near term, we reiterate that the entire China business only contributes about 13% of revenue. A significant selloff beyond this may present a buying opportunity.