Friday, April 28, 2017 2:58:08 AM
28-Apr-2017 08:03:15
To say that there is a lot at stake with the late-stage trials of AstraZeneca's cutting-edge immune-oncology drugs is to risk quite serious understatement. First, there are the potential patients who stand to benefit. Immune-oncology drugs, which help the body's own immune system to fight tumours, have the potential to be one of the biggest breakthroughs in cancer treatment in years.
Then, there is AstraZeneca itself. The Anglo-Swedish drug maker has been losing patents since 2011, which hurts its pricing power, and suffering declining sales
• especially of Crestor, its blockbuster cholesterol medication, and Nexium, which treats stomach acid.
The company has a pipeline of new drugs in development that it hopes will reverse these trends. A key one is durvalumab, which effectively turbocharges the patient's own defence system. It is radically different to conventional chemotherapy and could be used to treat several different forms of cancer.
The results of Astra's trial, codenamed "Mystic", which is testing durvalumab's use in combination with other therapies, are due to be released in 2017. But earlier this year the company said it was expanding a trial into the use of the drug as a monotherapy, raising concerns about the initial approach.
Analysts have predicted that sales of durvalumab could eventually hit $3.5bn (£2.7bn) a year. Pascal Soriot, Astra's boss, has rightly pointed out that this year could be a turning point for the firm. But which way will it turn?
Other companies are also waiting nervously for the results of the trials. Many others are developing their own immune-onocology therapies. Bristol Myers-Squibb, Merck and Roche are the other big beasts in this area but there are a lot of other smaller biotech firms. If Astra suffers a high-profile failure then the whole sector will be hurt, as investors start to fret that the promise of significant improvements in cancer treatment may not be delivered.
'A key drug is durvalumab, which effectively turbocharges Soriot said yesterday that there were a range of potential outcomes from the Mystic trial but admitted one them was "catastrophic the patient's defences' failure". He assigned a "very low probability" to that scenario. It won't just be AstraZeneca's shareholders with their fingers crossed that he's right.
AGM-ageddon Imagine owning shares in Alliance Trust, AstraZeneca, Cobham, Kaz Minerals, Persimmon, Schroders, Taylor Wimpey and Unilever. Sounds like a pretty diversified portfolio - a couple of financials balanced by a (supposedly) defensive pharma company. Then an actual defence stock in Cobham (although its shares have been pretty offensive over the past couple of years), a consumer goods giant, a miner and a couple of housebuilders.
But then, as a dutiful owner of a small stake in these companies who is keen to hold their management teams to account, you look up when and where they are holding their annual general meetings. And you realise that you will somehow have to clone yourself to get to them all on the same day.
The AGMs of Unilever, Cobham, Kaz Minerals, Schroders and Taylor Wimpey were all held more or less simultaneously yesterday morning in London. You would probably have to choose one of these before rushing over to the Park Plaza Riverbank Hotel for AstraZeneca's AGM, where 38.83pc of investors voted against its pay report. Grilling Alliance Trust's Lord Smith of Kelvin or Persimmon's Jeff Fairburn would necessitate a day trip to either Dundee or York Racecourse (provided you don't already live in one of those fair cities).
Given the number of publicly traded companies in the UK there are bound to be some clashes. But some of the bunching is absurd. On Jan 12 this year the retail industry offered up one of its Super Thursdays when the results of *big breath* Tesco, John Lewis, Marks & Spencer, Supergroup, Mothercare, Dunelm, Asos, Associated British Foods (which owns Primark), Debenhams, Booker, Moss Bros, AO World and *going slight blue in the face* JD Sports were all released at once.
It is surely not beyond the wit of investor relations executives to ease the worst of these logjams. Seriously, you'd be doing your investors (and business journalists) a service.
Beautifully boring Lloyds There's not much to say about the results of Lloyds Bank. Profits doubled, but that's because the one-off costs (mostly the money that the bank sets aside to pay for fines and compensation) were much lower than a year ago. Strip these out and underlying profits were up 1pc.
Net interest margin - an important measure of the difference between the interest that the bank receives from lending money and pays to borrow it - was also up (ever so slightly), from 2.74pc a year ago to 2.8pc. Likewise, the cost-income ratio did the right thing by coming down (a teeny tiny bit) - from 47.4pc to 47.1pc.
It was all a touch boring really. But, my, haven't shareholders been desperate for a good old dull set of banking results. It's been a while. Shares were up 1.6pc. Too much excitement can get pretty tedious.
ben.wright@telegraph.co.uk
Copyright © 2017 The Telegraph Group Limited, London
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