Biotech Values

[DewDiligence]

AZN: PLATO [Brilinta] [and the] JUPITER study [Crestor] makes me think AZN may be a good buy and hold for the next 4 or 5 years. Any thoughts?

The Crestor + Brilinta duo does seem to give AZN a formidable 1-2 punch in the CV arena. However, we haven’t yet seen the Brilinta data and it might yet have some warts that could derail its approval and commercial success. Moreover, today’s 6% rise for AZN represents a market-cap increase of about $3B, so a considerable amount of Brilinta upside has now been priced in.

An impetus for pouncing on AZN right now is that Brilinta raises AZN’s buyout vig. However, given that Roche, PFE and MRK are digesting a large acquisition or hope to be doing so soon, who is left as a plausible suitor for AZN? I think we can rule out JNJ and GSK, which leaves only NVS and SNY.

All told, I would recommend either waiting for a pullback or holding off until the Brilinta data are presented in August. JMHO, FWIW

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p.s. I was wondering if the name of the PLATO study was a typo and it was supposed to be PLUTO. Drug companies go out of their way to make the names of their clinical studies belong to some kind of hokey family, and AZN could’ve had a lock on the planets in our solar system. Nuvelo called their phase-3 Alfimeprase studies NAPA and SONOMA, and they went down like a bottle of wine left in your car trunk all summer :- )