AstraZeneca Lands FDA Authorization; What Next?

Drugmaker AstraZeneca (AZN) landed a bit of a prize recently. Its latest COVID-19 treatment now comes with authorization from the Food and Drug Administration.

Said treatment also has a few extra benefits going for it. Yet, can such a therapy find any ground? Does AstraZeneca have a new edge in the market? I’m mildly bullish on AstraZeneca; you may be able to do better elsewhere, but there’s a lot to like with this drugmaker.

Taking a look at AstraZeneca’s share prices for the last year shows a stock that’s made significant advances, but has had its share of losses as well. The company started out with a bit of a spike in most of January, though lost those gains in a matter of days.

A more gradual, but ultimately much larger, gain kicked off in March and lasted well into May. The stock surpassed a weak point in the first week of June, and gains continued into July.

A similar pattern then settled in for the rest of the year. The company hit its high-water mark for the year in early November, then started a slide that was only recently reversed. (See Analysts’ Top Stocks on TipRanks)

The biggest reason for those gains was FDA authorization for EVUSHELD, a long-acting antibody (LAAB) platform. EVUSHELD designed to offer protection against COVID-19 for those who wouldn’t derive benefit from vaccines. It’s also the only antibody treatment delivered in an “intramuscular dose.” This allows for injection into several sites on the body.

Reports note that the U.S. government has already purchased 700,000 doses of the product. The total value of the purchase: roughly $726 million.

AstraZeneca’s COVID-19 vaccine, meanwhile, is on track to deliver three million doses this year. The U.S. is not one of its markets, which makes the accomplishment even brighter for the handicap.

Wall Street’s Take

Turning to Wall Street, AstraZeneca has a Moderate Buy consensus rating. That’s based on two Buys and one Hold assigned in the past three months. The average AstraZeneca price target of $73 implies 35% upside potential.

More a COVID Play

With a vaccine and a treatment platform in place, this company is delivering the goods when it comes to fighting COVID-19. Having a treatment as well may give it a boost by addressing a whole new target market. However, it’s vital to note that AstraZeneca is a lot more than just a COVID fighter.

A look at AstraZeneca’s range of available medications illustrates the depth of its bench.

Granted, AstraZeneca has a lot of competition on nearly every front. It’s the one problem with drugmakers; there’s no shortage of them in pretty much any field.

If you’ve been down the pharmacy aisle at your grocery store, you’re well aware of how many choices there are. Further, AstraZeneca has been on the bad end of that competition for a while now. Its earnings report from about a month ago didn’t exactly inspire confidence in investors.

It revealed that the company lost money developing its COVID-19 vaccine, but expected to gain a lot of that back selling it. However, that wasn’t enough to keep investors fully happy.

AstraZeneca also has a fairly stable dividend history as well. The company did cut the second payment of the biannual dividend in half between 2015 and 2016.

However, it maintained the new levels for the last five years. Throw in the fact that it’s selling at the lowest prices since about May of this year, and you may well have a solid entry point.

Concluding Views

AstraZeneca is one of the leading COVID-19 fighting operations out there. It’s also got a panoply of other drugs ready to go to tackle a host of diseases. About the only real problem AstraZeneca has is that, as good as that sounds, it’s not a unique proposition any more.

AstraZeneca is a real force in the field. Yet, so is nearly every other drugmaker out there.

Disclosure: At the time of publication, Steve Anderson did not have a position in any of the securities mentioned in this article.