Astra plunges as vital cancer drug fails trial

Investors took fright from AstraZeneca today as trials of a long-awaited breakthrough lung cancer treatment failed to deliver the expected benefits for patients.

The trial, known as Mystic, was supposed to set AstraZeneca on course for the next decade and analysts had been keenly awaiting the results.

Instead the results sent the shares into a tailspin, down 17% to 4263p, and forced the chief executive to insist he was not leaving the drugs giant.

The Mystic trial was crucial to Astra’s attempt to grab a share of the fast-growing immuno-oncology drugs market, worth $8 billion (£6.3 billion) today and projected to reach $50 billion in value.

However, the results have shown that the immunotherapy drug does not stop cancer worsening in patients for any longer than existing treatments.

The share price was on course for its worst day since listing in 1993 and under-pressure boss Pascal Soriot tried to put to rest rumours he was about to jump ship to the top job at Israeli rival Teva.

“I am proud to be the chief executive of this company and I look forward to continuing on the journey ahead,” he told journalists.

Pushed on talk he might leave he said: “I am here today. I am very committed to delivering our strategy. The board is firmly behind our strategy and is very satisfied.”

Rumours that AstraZeneca could become a takeover target have resurfaced in recent months, with Novartis suggested as a potential bidder.

Asked about whether the UK’s second-biggest drugs company was a takeover target, Soriot said: “There’s always interest in companies with strong pipelines. If the Mystic result had been better, I’m sure we would be even more attractive.”

Further results from the Mystic trial, into overall survival rates, will be delivered in the first half of 2018. “Despite the outcomes of the initial results we must be patient and wait for the overall survival analysis,” Soriot said.

Liberum analysts said the revelation was “pretty much the worst-case scenario for Mystic”.

Mick Cooper, analyst at Trinity Delta, said: “AstraZeneca and Pascal Soriot might both be approaching Teva quietly in light of these results.”

AstraZeneca boasted of its strong drug pipeline, and, in particular, its immunotherapy drug development, when it successfully fended off a bid from US drug giant Pfizer worth $54 billion, three years ago.

Astra’s older blockbuster drugs are coming off patent. But growth from its new drugs has been slow. Today’s results showed a 10% fall in first-quarter revenue to £3.8 billion. Analysts had been looking for revenue of $5 billion.

There was some better news elsewhere, with positive results from its lung cancer pill Tagrisso. It also revealed a strategic tie-up with rival Merck to help bring another cancer drug Lynparza to patients.