AstraZeneca's Stock May Get Help From Prostate Drug (Update1)

The following article provides a glimpse of hope for Terminal Stage Prostate Cancer Patients. The European company AstraZeneca has developed a medicine called ZD4054 that could potentially lengthen the lives of terminally ill patients. It seems that we are inching closer and closer to a cure for cancer. Just a matter of when and who.


By Eva von Schaper and Dermot Doherty

Sept. 20 (Bloomberg) -- AstraZeneca Plc is staking the growth of its flagging cancer-drug unit on a prostate tumor medicine that treats lethal forms of the disease.
The experimental therapy, called ZD4054, may lengthen the lives of terminally ill patients in a study released in Barcelona next week. The report may revive the London-based company's shares after a 12 percent decline this year.
AstraZeneca, the U.K.'s second-largest drugmaker, started the final phase of testing in June and is scheduled to file for approval in 2009. About 27,000 Americans die each year of prostate cancer, and analysts say the medicine is likely to generate $1 billion in annual sales. AstraZeneca needs new therapies after scuttling three medicines last year.
``They're not positioned to tolerate another failure with a phase III candidate,'' said Nick Turner, an analyst at Mirabaud Securities in London. ``ZD4054 is important,''
The company, once the world's largest cancer-drug maker, has fallen to fifth, according to Paul Diggle, a London-based analyst with Code Nomura. Its best-selling Arimidex and Casodex cancer treatments, with combined second-quarter sales of more than $770 million, are set to lose patent protection in 2008 and 2009.
AstraZeneca shares rose 9 pence, or 0.4 percent, to 2,427 pence at 10:41 a.m. in London trading. AstraZeneca has lost 25 percent in the past 12 months, while the 13-member Bloomberg Europe Pharmaceutical Index has declined 5.7 percent.
ZD4054 is one of several cancer medicines AstraZeneca is moving further into trials, Chief Executive Officer David Brennan said yesterday at a meeting with reporters. Testing of the drug was pushed up because scientists said it showed better activity than similar compounds in early studies, he said.
Cutting the Flow
The pressure on AstraZeneca to deliver new medicines rose after the heart drug AGI-1067 in April failed to reduce chest pain and other disease complications, the company's latest compound to fall short of its target. The experimental medicine was the fourth one shelved by Brennan. Stroke drug NXY-059, also known as Cerovive, was dropped in October 2006, following Exanta for blood clots in February and Galida for diabetes in May.
``This could be a step back to the front line of cancer for AstraZeneca,'' Diggle said. Only 8 of the 37 analysts whose coverage is tracked by Bloomberg suggest investors buy the company's shares.
The product cuts off the growth of blood vessels tumors need to spread to other organs by blocking the action of a cell protein called endothelin A. AstraZeneca, which has struggled to get wider use of its Iressa lung cancer medicine, is trying for success in a treatment area where other companies have failed.
Rival Failures
ZD4054 is the second therapy to exploit a blood-vessel blocking strategy to interfere with prostate cancer's spread. In 2005, Abbott Laboratories failed to win approval from the U.S. Food and Drug Administration for its experimental drug, Xinlay, which also sought to inhibit endothelin.
A panel of advisers said the company didn't show the drug delayed the disease. It was also linked to a risk of heart failure. Unlike Xinlay, ZD4054 doesn't hamper cell death.
``The risk is high but the reward is also high,'' said Erik Hultgard, an analyst at Kaupthing Bank in Stockholm who has a buy rating on the stock. ``AstraZeneca is very optimistic, and the data should be encouraging.''
Robert Dreicer, a Cleveland Clinic doctor who tested ZD4054, said the way Abbott conducted its study made it difficult for regulators to evaluate the product's usefulness.
``The way the trials were designed was problematic,'' Dreicer said. ``I believe the class is promising and has activity.''
Third of All Cancers
Drugmakers have had setbacks trying to develop treatments for advanced prostate cancer. U.S. regulators in May delayed Seattle-based Dendreon Corp.'s Provenge vaccine for prostate cancer, while GPC Biotech AG, a German biotechnology company, in July withdrew a U.S. application for its prostate cancer drug, satraplatin.
More than 220,000 men will be diagnosed with prostate cancer in the U.S. this year, according to the National Cancer Institute in Bethesda, Maryland. Prostate cancer accounts for about a third of all cancer diagnoses in men, second only to skin cancer.
Investors have lost confidence in AstraZeneca's pipeline after the late stage failures. Analysts estimate that investors are willing to pay about $11.92 for each dollar of AstraZeneca earnings, the second cheapest of European drugmakers. That compares to just over $20.42 for Roche, and $16.50 for Novartis, according to according to data compiled by Bloomberg.
``As many men with hormone-refractory prostate cancer are elderly and frail, we would like to have a drug that hinders hormone refractory disease with few side-effects,'' said Dr. Par Stattin, a urologist at Umea University Hospital in Umea, Sweden. ``There is a big need for such a drug.''
To contact the reporter on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net ; Dermot Doherty in Geneva at Ddoherty9@bloomberg.net


source: Bloomberg.com