AstraZeneca (AZN) has received approval from the U.S. Food and Drug Administration (FDA) for its sodium-glucose cotransporter 2 inhibitor Farxiga to treat chronic kidney disease (CKD).
This approval is based on the positive data from the Phase 3 trial for the drug. Chronic kidney disease is characterized by a decrease in kidney function and is associated with an increased risk of heart disease, dialysis, or the need for a kidney transplant.
Notably, the number of people affected by CKD in the US is about 37 million at present. The disease is estimated to become the fifth leading cause of death across the globe by 2040.
Mene Pangalos, EVP, BioPharmaceuticals R&D, said, “Today’s approval is the most significant advancement in the treatment of chronic kidney disease in more than 20 years.” (See AstraZeneca stock analysis on TipRanks)
Pangalos added, “We have shown impressive efficacy for Farxiga in type-2 diabetes, heart failure with reduced ejection fraction and, most recently, chronic kidney disease and we are thrilled to be able to bring this medicine to millions of patients in the US.”
On April 14, UBS analyst Michael Leuchten reiterated a Buy rating on the stock but did not assign any price target.
Leuchten estimates about 21% of AstraZeneca’s revenue is exposed to generic competition but does not see a patent cliff happening. Patent cliff refers to a drastic fall in a drug’s sales once its patent protection expires.
Leuchten also thinks the market is not paying due attention to the company’s ability to “manage the life cycle of Farxiga and Lynparza.”
Consensus on the Street is that AstraZeneca is a Moderate Buy, based on 7 Buys, 1 Hold, and 1 Sell. The average analyst price target of $66 implies 24.4% upside potential. Shares have gained about 7% over the past month.
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