AstraZeneca dials up its immuno-oncology focus with blockbuster hopes

AstraZeneca's ($AZN) internal forecast for a bright future is heavily dependent on a cache of new cancer immunotherapies, and the U.K. drugmaker is planning to test its lead oncology treatment in more and more tumor types with hopes of delivering on a $6.5 billion peak sales estimate.

In tandem with its quarterly earnings statement, AstraZeneca disclosed on Thursday that it will kick off a Phase III trial to test MEDI-4736's effects on head and neck cancer this year, expanding upon an ongoing pivotal study pitting the immunotherapy against non-small cell lung cancer. And the company may well venture into another tumor type before the end of 2014, CMO Briggs Morrison said.

AstraZeneca's expanded plans are part of a sweeping effort to affirm the potential of MEDI-4736, a treatment designed to galvanize the body's T cells against tumors and spur the self-destruction of cancer cells. Apart from its internal R&D efforts, the company has struck deals to study its lead cancer therapy as part of combination with drugs from Incyte ($INCY), Advaxis ($ADXS) and, most recently, Kyowa Hakko Kirin.

MEDI-4736, which blocks the immune checkpoint PD-L1, is AstraZeneca's best shot at catching up to rivals Bristol-Myers Squibb ($BMY), Merck ($MRK) and Roche ($RHHBY), all of which are further along in the race to capitalize on a new class of cancer treatments that hold promise across a wide range of tumors. Bristol-Myers has already picked up Japanese approval for its nivolumab, and Merck is in the midst of a rolling FDA application for pembrolizumab. Each contender is adopting a similar strategy, chasing regulatory nods in their most advanced indications while running a swath of trials in hopes of expanding their drugs' labels after approval.

But analysts figure there will be room for more than blockbuster on the immunotherapy market, which Citigroup estimates will reach $35 billion a year. And AstraZeneca, not yet out of the woods with investors after (for now) escaping Pfizer's ($PFE) clutches, needs that to be true.

During its late-winter war for independence, the company promised to grow sales a whopping 75% over 10 years, expecting to reach $45 billion by 2023. Key to that figure is the oncology pipeline, and AstraZeneca expects a $6.5 billion peak for MEDI-4736, $3 billion in sales for the lung cancer-treating AZD9291 and another $2 billion from the ovarian cancer therapy olaparib.

- read the release (PDF)

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