Company Reports

After the market close on Sept. 11, AstraZeneca reported that Etcamah failed to show progression-free survival benefit in SERENA-4, a Phase 3 trial in the upfront first-line setting for hormone receptor-positive, HER2-negative metastatic breast cancer patients.

AstraZeneca has built its leading presence in the pharma and biotech industry on patent-protected drugs and a developing pipeline that support a wide moat. The strong replenishment of new drugs sets up solid long-term growth.

The Financial Times reported on Aug. 2 that Bristol-Myers Squibb and AstraZeneca are in discussions with regard to a possible merger. Astra shares fell 8% and Bristol shares were down about 1% in early trading on Aug. 3.

Revenue in the quarter grew 4% year on year at constant currency, and core EPS rose 18%. Management reiterated its full-year guidance of mid- to high-single-digit revenue growth and low-double-digit core EPS growth. Shares were largely unchanged from the previous day's close.

Ionis and AstraZeneca's phase 3 study of Wainua (eplontersen) in ATTR-CM missed its primary endpoint, showing no statistically significant benefit when added to standard of care. This drove significant stock movement with Ionis and AstraZeneca falling nearly 24% and 6%, respectively on July 9.

AstraZeneca's first-quarter revenue grew 8% year on year at constant currency and core earnings per share rose 5%, affected by a lower tax rate in the previous year. Management confirmed guidance for mid- to high-single-digit revenue growth and low-double-digit core EPS growth.

In the fourth quarter, AstraZeneca generated 2% year-on-year core revenue growth, a 5% core operating profit decline, and a 2% core earnings per share decline at constant currency. 2026 guidance is for mid- to high-single-digit revenue growth and a low-double-digit core EPS decline.

AstraZeneca has built its leading presence in the pharma and biotech industry on patent-protected drugs and a developing pipeline that support a wide moat. The strong replenishment of new drugs sets up solid long-term growth.

In the third quarter, AstraZeneca generated 10% year-on-year core revenue growth, 13% core operating profit growth, and 12% core EPS growth at constant currencies. Management reiterated its full-year guidance of high-single-digit revenue growth and low-double-digit core EPS growth.

On Oct. 10, 2025, AstraZeneca and the US government announced an agreement on US drug pricing. In return, the US agreed to delay the implementation of Section 232 tariffs for three years. Astra is the second drugmaker to announce a deal after Pfizer.

AstraZeneca has built its leading presence in the pharma and biotech industry on patent-protected drugs and a developing pipeline that support a wide moat. The strong replenishment of new drugs sets up solid long-term growth.

AstraZeneca reported 11% year-on-year revenue growth, excluding a 1% currency headwind, and core operating profit growth of 14%. Management reiterated its full-year guidance of high single-digit revenue growth and low-double-digit core earnings per share growth.

President Trump released an executive order on May 12 calling for a 30-day negotiation period between the Department of Health and Human Services and the biopharma industry, with the threat of a rule from the Centers for Medicare and Medicaid Services to lower US drug prices if no deal is reached.

AstraZeneca posted 7% reported year-on-year revenue growth, which includes a 3% currency headwind, and core operating profit growth of 12%. Management reiterated its full-year guidance of high-single-digit revenue growth and low-double-digit core earnings per share growth.

AstraZeneca has built its leading presence in the pharma and biotech industry on patent-protected drugs and a developing pipeline that support a wide moat. The strong replenishment of new drugs sets up solid long-term growth.

Wide-moat AstraZeneca’s fourth-quarter results were in line with our expectations. The company’s revenue guidance for 2025 was high-single-digit growth at constant currency, which we think is achievable, with a low-single-digit foreign exchange headwind.

Following President-elect Donald Trump’s Nov. 14 announcement of the nomination of Robert F. Kennedy Jr. as secretary of the US Department of Health and Human Services, there have seen several more nominations for leadership in the 13 HHS divisions, including Dr. Mehmet Oz (Centers for Medicare and Medicaid Services) on Nov. 19, Dr. Marty Makary (US Food and Drug Administration) and Dr. Dave Weldon (Centers for Disease Control and Prevention) on Nov. 22, and Dr. Jay Bhattacharya (National Institutes of Health) on Nov. 26. Overall, we think these selections show a consistent theme of introducing potential disruptive forces to US healthcare, although their lack of experience and the power of career staffers in these agencies could serve to blunt any significant proposed changes. We continue to see obesity drugs and vaccines as areas of potential scrutiny, although without any clarity on proposals, we’re not making any changes to our fair value estimates following these announcements.

President-elect Donald Trump announced on Nov. 14 that he is nominating Robert F. Kennedy Jr. to be secretary of the Department of Health and Human Services under his new administration in 2025. RFK Jr. has strong views on public health and, if confirmed, could use his position to make changes at several of the 13 HHS divisions. In our Nov. 8 note, we discussed the potential tailwinds of a Trump administration, including possible repeal of the Medicare negotiation provision in the Inflation Reduction Act, less Federal Trade Commission scrutiny of acquisitions, and a likely continuation of lower corporate taxes. However, if RFK’s nomination is confirmed, we expect more “wild card” headwinds to the industry will come to fruition. As the HHS covers the US Food and Drug Administration and the Centers for Disease Control and Prevention, an HHS secretary skeptical of vaccine and obesity drug benefits could work to erode public trust, put up roadblocks for approval of new vaccines, and prevent the CDC from recommending any vaccines that make it through the approval process. With less federal guidance, we think it is possible certain states could waver in support of broad mandates for childhood vaccines. All of these could weigh on sales of vaccines in the US, including covid vaccine makers Moderna and BioNTech and big biopharma vaccine makers like GSK (we model 14% of GSK revenue from US vaccine sales in 2024), Pfizer (12%), Merck (9%), and Sanofi (6%).

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.

We think that President-elect Donald Trump brings a mix of potential headwinds and tailwinds to the biopharma industry, and we’re not making any adjustments to our fair value estimates at this time. We had previously assumed that the most likely case was split control of the presidency and Congress by Democrats and Republicans. However, with Republicans locking in control of the Senate and holding a lead in elections in the House, we think it looks increasingly likely that Trump and his party could have control across both branches of government, making any potential policy priorities more likely to be implemented.