Is AstraZeneca planning to peel off its China business? By CEO Pascal Soriot’s response to that question, it may only a contingency plan.
A Financial Times report last month suggested that AstraZeneca has drafted plans to spin its China operations—the largest of any foreign pharma by sales—into a separately listed company to protect the group against rising geopolitical tensions.
So when AstraZeneca’s quarterly earnings press call came on Friday, Soriot took a chance to clear the air.
“We study many, many things, many options, many strategies, many scenarios, 90% to 95% of what we study, we never put in place,” Soriot said Friday during the press call. “So on this specific rumor, we’d only say that we are satisfied with the way we are structured in China today. And our focus is delivering these medicines to patients and partnering with local companies, biotech companies in particular.”
As part of its second-quarter earnings report (PDF), AstraZeneca dialed up its 2023 revenue guidance for China. It now expects the unit’s revenue to increase by low-to-mid single-digit percentages. That compares with AZ’s prior expectation of low-single-digit growth.
AstraZeneca has seen many years of commercial success in China. Lately, though, ruthless price cuts led to a major slowdown, culminating in a sales decline in 2022.
In the first six months this year, AZ generated $3 billion in the market, good for 7% growth.
To explain the rosier outlook on a separate call with investors, AZ’s China and international president, Leon Wang, pointed to several new launches. These include BTK inhibitor Calquence, which won its initial China go-ahead in March in mantle cell lymphoma. Perhaps more importantly, the Daiichi Sankyo-partnered cancer drug Enhertu won its initial China nod in February for HER2-positive breast cancer and followed with an approval for HER2-low disease earlier this month.
Enhertu has become a star med worldwide, especially with its historic approval in the U.S. to open HER2-low as a new treatment category in breast cancer. In the first half of the year, the HER2-targeted antibody-drug conjugate pulled in $1.2 billion in combined global sales for AZ and Daiichi, up from $436 million in the same period last year.
What's more, AZ and Daiichi now have an opportunity to pursue an additional indication for Enhertu in heavily pretreated HER2-positive tumors regardless of their location. That could come courtesy of results from the phase 2 DESTINY-PanTumor02 trial.
After reporting positive tumor response data in June, AZ and Daiichi on Thursday said Enhertu showed meaningful disease progression and patient survival data, too. AZ has kept mum about its detailed regulatory plans for this potential use.
During Friday’s investor call, AZ’s oncology R&D chief Susan Galbraith, Ph.D., said the drug demonstrated different levels of benefit based on various tumor HER2 expression levels. Patients with high HER2 expressions previously showed stronger responses in the phase 2 study than those with lower levels.
“Conversations with regulatory authorities, including the FDA, are ongoing,” Galbraith said. “Initial discussions are encouraging.”
Even as Enhertu tracks toward greater sales, AZ’s investors are heavily focused on the company’s second Daiichi-partnered antibody-drug conjugate, the TROP2-targeted datopotamab deruxtecan.
During the Friday earnings call, analysts tried multiple ways to get more information from AZ about the medicine. Although a phase 3 trial in non-small cell lung cancer (NSCLC) recently hit its primary progression-free survival endpoint, the study remains ongoing for the dual primary endpoint of overall survival. And some side effect-related deaths also spooked investors.
AZ has had initial discussions with the FDA about the medicine, and it’s preparing to file an application, Galbraith said.
Meanwhile, PD-L1 inhibitor Imfinzi delivered a surprisingly good performance in the second quarter. Its sales reached $1.1 billion, good for 58% year-over-year growth at constant exchange rates.
About 20% to 30% of Imfinzi’s growth these days stems from established indications, such as stage 3 NSCLC, AZ’s oncology business head, David Fredrickson, said on the earnings call. But recent new approvals in biliary tract cancer, and for its use in combination with CTLA-4 agent Imjudo in metastatic NSCLC and liver cancer, are pulling serious weight, he said.
All told, AZ’s total revenue in the second quarter reached $11.4 billion, which represents a 9% increase at constant currencies. The company maintained its full-year guidance, expecting revenues to grow by low-to-mid single-digit percentages.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.