Drugmakers AstraZeneca (AZN) and Daiichi Sankyo’s (DSKYF) cancer drug, Enhertu, has been added to China’s National Reimbursement Drug List (NRDL) and will be covered by state-run medical insurance starting January 1. The inclusion comes even as AstraZeneca faces scrutiny due to an investigation into Leon Wang, its China president. Enhertu joins a list of 91 drugs that include treatments from major players like Johnson & Johnson (JNJ) and Sanofi (SNY).
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The NRDL is crucial for pharma companies that want to compete in China, which is the world’s second-largest pharmaceutical market. Drugs on this year’s list will see prices cut by an average of 63% in order to make them more accessible to patients. For AstraZeneca, China is a key market that contributed $5.8 billion to its revenue in 2023, which makes it the company’s third-largest market.
Despite the opportunities, AstraZeneca’s operations in China face challenges as authorities investigate Wang for alleged medical insurance fraud. The outcome of this probe could have significant implications for the company’s future in the region, as it could possibly lead to a slowdown in growth.
AstraZeneca Sees Progress in Prostate Cancer Trial
In a separate development, AstraZeneca’s (AZN) Phase III CAPItello-281 trial showed that Truqap, when combined with two other treatments (abiraterone and ADT), helped slow the progression of a specific type of advanced prostate cancer (mHSPC) better than the standard treatment with a placebo. There’s also an early sign that this combination might help patients live longer, but more data is needed to confirm that.
In addition, the safety of the treatment combination was in line with what’s already known about these medicines. AstraZeneca plans to share the results at a medical conference and with health regulators worldwide.
Is AstraZeneca a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AZN stock based on five Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 7% rally in its share price over the past year, the average AZN price target of $87.67 per share implies 30.46% upside potential.
