AstraZeneca"s contact to velocity approval of cancer drug rejected by US panel

AstraZeneca, Britain’s second-largest drugmaker fought off a £69bn takeover approach from US rival Pfizer final month. Photograph: Phil Noble/Reuters

AstraZeneca has suffered a setback right after a panel of US overall health authorities rejected its request for accelerated approval of a new ovarian cancer drug.

The shock determination by the US FDA’s Oncologic Medication Advisory Committee comes at a delicate time, with Britain’s second-biggest drugsmaker working difficult to supply on its drug pipeline right after fighting off a £69bn takeover method from bigger US rival Pfizer last month. Any setbacks on new medicines could stir discontent amid AstraZeneca shareholders, some of whom needed the board to engage further with Pfizer.

The FDA panel asked the AstraZeneca to submit more clinical information on olaparib, a upkeep treatment for relapsed ovarian cancer which is in mid-stage clinical trials.

The information is due at the end of 2015, but AstraZeneca had hoped to get the green light for the remedy from the FDA in October. Chief medical officer Briggs Morrison said the organization was disappointed by the determination.

Even though the setback must have minor affect on AstraZeneca’s future revenues and profits, investors and analysts are viewing closely for any slip-up in its R&ampD efforts.

New medicines are important to its ambitious forecast of a 75% leap in revenues from $ 26bn to more than $ 45bn by 2023, a key plank of the defence technique outlined by chief executive Pascal Soriot. At the heart of it are new cancer immunotherapy remedies, for which the business acquired largely good feedback at a big US oncology conference at the commence of the month.

Bernstein analyst Tim Anderson explained: “The rejection comes at a essential time simply because failed R&ampD efforts might make AstraZeneca shareholders more inclined to push AstraZeneca into Pfizer’s arms. Is the olaparib ruling a main setback for AstraZeneca that will materially adjust how traders consider about AstraZeneca? No, but every single bit of slippage at the firm probably does tilt the balance somewhat more in favour of a future Pfizer-AstraZeneca tie-up.”

He reckons the odds are less than 50% that either AstraZeneca asks Pfizer back to the negotiating table in under two months, or the New York drugsmaker returns with a greater supply in November, but “obviously the predicament is fluid”. AstraZeneca is reportedly thinking about promoting off the rights to future revenues from present medicines or partnering on assets to make itself significantly less appealing to Pfizer.

Meanwhile, analysts at Jefferies earlier this month put an 80% probability on AstraZeneca inviting Pfizer back right after a mandatory cooling-off period ends in late August.

AstraZeneca"s contact to velocity approval of cancer drug rejected by US panel