AstraZeneca's drug has produced positive results in the fight against breast cancer. What about the stock?

Shares in pharmaceutical companies AstraZeneca and Daiichi rose as their cancer drug Enhertu showed encouraging results in patients with early-stage breast cancer. If approved, the drug would be available to 130,000 new patients in the G8 countries, AstraZeneca claims. Analysts believe its shares are fairly valued unlike Daiichi, which has upside potential.

The anti-cancer drug Enhertu, developed by UK-Swedish AstraZeneca and Japan's Daiichi Sankyo, has improved chances of cure when tested among patients with early-stage breast cancer. This follows reports from AstraZeneca of two Enhertu studies.

The study found that Enhertu, which is now used for late-stage certain cancers, was more effective than Roche's Kadcyla in preventing recurrences and showed promising results when used before surgery. This progress suggests that the drug could move to wider use with the potential for a cure, Reuters noted.

AstraZeneca estimates that approval of the drug for use in early-stage cancer cases could make the drug available to about 130,000 new patients in the G8 industrialized countries. AstraZeneca shares were up 1.3 percent at the moment in London trading on Oct. 20, while its receipts in New York were up 0.6 percent. Shares of Daiichi in Tokyo added 2.7%.

The research was a crucial test of AstraZeneca and Daiichi's six-year partnership, which has already turned Enhertu into one of the fastest-growing cancer drugs by revenue, with $3.75 billion in 2025, Bloomberg wrote. Enhertu was a key element of AstraZeneca's biggest deal in more than a decade - the company agreed to pay Daiichi up to $6.9 billion for joint development.

"Our goal is a complete cure, that's what we're aiming for," Daiichi's U.S. CEO Ken Keller said in a Bloomberg statement. - It appears that Enhertu will become the baseline therapy for early-stage HER2-positive breast cancer."

Enhertu belongs to a class of antibody-drug conjugates - drugs that deliver chemotherapy directly to tumor cells, minimizing damage to healthy tissue. The study was conducted on patients with HER2-positive breast cancer, which occurs in about 20% of cases.

In one study, more than 92% of patients who received Enhertu after surgery were still alive three years later and showed no signs of disease, compared to 84% in the group taking Kadcyla. The drug reduced the risk of death or recurrence by 53%. Severe side effects were more common with Kadcyla, but Enhertu caused more cases of interstitial lung disease, a potentially dangerous inflammation and scarring of tissue, Bloomberg noted.

In the second study, the drug was administered before surgery. Two-thirds of patients who received Enhertu had no traces of cancer in the breast or lymph nodes at the time of surgery, compared to 56% in the standard therapy group. Patients also reported fewer severe side effects. The scientists emphasized that the data on long-term recurrence-free survival are still incomplete, but show a positive trend.

This year the growth of AstraZeneca securities reached 24%. Morningstar analyst Jay Lee noted in early October that AstraZeneca's drug portfolio is one of the strongest in the industry, and some drugs could become real blockbusters, especially in oncology.

The company also has a strong presence in lung disease therapies and diabetes treatments, although these drugs typically don't have the same pricing power as anticancer drugs. In addition, AstraZeneca is targeting the weight-loss drug market and wants to compete with Eli Lilly's Mounjaro. Lee estimates the stock's fair value at 124 ($166) with a current price of about 127 ($170).

Daiichi shares have risen in value by nearly 13% over the past 30 days: they have caught the attention of investors after declining for a year and a half, writes SimplyWallStreet. Overall, it has risen 57.7% over the past five years, indicating the company's real long-term value despite fluctuations in investor sentiment. Analysts believe that Daiichi stock is undervalued right now and is trading below its real value. According to their calculations, the company has potential for growth in the coming years: free cash flow and earnings are expected to grow significantly by 2026-2030.

Experts describe the company's strengths as innovations in oncology and successful international partnerships, which can expand the market and strengthen its position in the global arena. At the same time, analysts note the risks associated with high competition, dependence on a few key drugs and significant expenditures on research and development.

This article was AI-translated and verified by a human editor