AstraZeneca's revenue targets dented after Amgen's termination of brodalumab agreement, analysts say

Analysts suggested that AstraZeneca may struggle to meet its previously announced goal of doubling revenue to $45 billion by 2023 following Amgen's decision to exit a partnership to co-develop the experimental psoriasis therapy brodalumab. Amgen elected to end the co-development agreement last week after concluding that the drug's risks of suicidal thoughts could restrict its use.

Barclays analyst Simon Mather, who had estimated that brodalumab could generate peak annual revenue of $880 million, remarked the commercial perspectives are clearly very challenging." Mather added "Amgen's decision to terminate the brodalumab collaboration does little to increase confidence in [AstraZeneca's] pipeline aspirations."

In addition, UBS's Alexandra Hauber commented that brodalumab was a "critical asset" for AstraZeneca. Based on Amgen's decision to exit the partnership, Hauber reduced her earnings per share estimate for the company by 3 percent to 9 percent for 2017 to 2020.

Meanwhile, Deutsche Bank analyst Richard Parkes stated that the decision by Amgen was a surprise, adding that terminating the drug's development would hit long-term consensus forecasts for AstraZeneca's earnings by around 2 percent.

AstraZeneca, which said that it would review clinical data before deciding on the future of brodalumab, touted the drug as a key asset while it resisted takeover efforts from Pfizer last year, stating that the therapy could generate between $500 million and $1.5 billion in annual revenue.

For related analysis, see ViewPoints: Amgen walks away from brodalumab – red flag for AstraZeneca or IL-17 class?

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