AstraZeneca saw more than £10 billion ($13.08 billion) wiped off its market value on Thursday, yet one of Britain’s most influential investors argued the pharma giant’s investment case remains “very, very attractive.”
Shares in the ailing Anglo-Swedish pharmaceuticals group tumbled almost 16 percent Thursday, hitting its lowest level in five months after the firm announced the failure of a high-profile medical study.
Results of the ‘Mystic‘ study showed a combination of two injectable immunotherapy drugs were no more effective at shrinking tumors in patients with advanced lung cancer than chemotherapy.
“The investment case for AstraZeneca is about so much more than this one trial. Across a broad spread of disease areas, the company is developing new ground-breaking therapies which have significant commercial potential,” Neil Woodford, a top AstraZeneca shareholder and one of the U.K.’s best-known fund managers, said in a blog post late Thursday.
He argued the scale of the share price fall was not evidence of the failure of the drug, his fund’s rationale for holding the stock or AstraZeneca’s overall strategy.
The founding partner of Woodford Investment Management suggested an oversensitive market had failed to place sufficient value on one of the company’s most promising cancer drugs.
“Perhaps, at a time like this when the stock market is in such a febrile state and prone to overreact to news, especially when it is bad, it is important to remind investors that all four of the large immuno-oncology players (Roche, Merck, Bristol-Myers Squibb and AstraZeneca) have all had cancer trial set backs in recent months,” Woodford said.
AstraZeneca’s Chief Medical Officer, Sean Bohen, said while the results of the drug trial had been “disappointing”, the group would continue to assess whether the treatment prolonged overall survival.
The news came as AstraZeneca reported its total revenue had slipped 11 percent to $10.45 billion in the first six months of the year. Product sales were also down 11 percent to $9.78 billion over the same period. Shares in AstraZeneca were slightly higher during Friday afternoon trade.
AstraZeneca's dramatic share dive amid drug trial setback 'not justified', says star stock picker