Top Picks 2019: AstraZeneca PLC (AZN)

01/10/2019 5:00 am EST


John Eade

Chairman and CEO, Argus Research Group

Based in the UK, AstraZeneca PLC (AZN) focuses on treatments for respiratory, autoimmune, and metabolic conditions, as well as on cardiology, neurology, and oncology drugs, explains John Eade, analyst with the leading independent research firm, Argus Research.

While most companies in the Big Pharma group have moved beyond the patent cliff phase and are beginning to grow, AstraZeneca has lagged, as it faces pricing pressure and generic threats to its former blockbusters Nexium (for ulcers) and Crestor (for high cholesterol).

Management is taking steps to address these challenges by cutting costs and assembling a strong new drug pipeline, including a promising checkpoint inhibitor, Imfinzi, to treat various cancers.

Imfinzi has now been approved as a first-line treatment for lung cancer in the EU, in addition to the U.S., and as a treatment for bladder cancer. It is also being submitted as a treatment for early-stage lung cancer.

There’s more in the pipeline. EU and Japanese regulatory decisions are expected on Forxiga for type-1 diabetes in 2H19. Lezepelumab, a treatment for severe asthma, has received a breakthrough therapy designation from the FDA.

There is a solid combination of growth & income. We expect AstraZeneca’s pipeline and management’s focus on cost-cutting to return the company to growth in 2019. The yield of 3.4% is above the Big Pharma industry average. Our12-month target price is $46.

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