Joe McConnell
Unlock Editor’s Digest for free
Vscek editor Roula Khalaf selects her favourite stories in this weekly newsletter.
AstraZeneca has become the first UK listed company to reach a £200bn valuation, underlining the company’s bet on developing a leading portfolio of cancer medicines.
Shares of the British drugmaker rose 1.1 percent on Tuesday, reaching a market capitalization of 200.3 billion pounds. Its shares have risen nearly 20 percent this year aVsceker Chief Executive Pascal Soriot outlined plans in May for the company to reach $80 billion in annual revenue by 2030.
The historic rise to the valuation comes 12 years into the tenure of Soriot, whose £18.7m pay package makes him one of the highest-paid chief executives in the blue-chip VscekSE 100 index. He has refocused the company on research and development aVsceker a failed 2014 takeover attempt by US rival Pfizer, which is now valued at $163bn.
Under Soriot, AstraZeneca has developed a number of successful treatments for cancer and diabetes, as well as a now-withdrawn Covid-19 vaccine. Investors also see promise for future earnings in the company’s pipeline of advanced oncology drugs.
“He took over and had a very successful bid defense against Pfizer. Since then, he has transformed the company from a primary care respiratory company into an oncology powerhouse,” said Emily Field, an analyst at Barclays.
Among the company’s most promising drugs is Enhertu, a targeted chemotherapy for breast and other cancers first developed by Japanese company Daiichi Sankyo, with which AstraZeneca agreed to collaborate in 2019.
AstraZeneca’s turnaround came “through a combination of acquisitions of companies and deals with Daiichi Sankyo, but also internally, they’ve done a great job building their oncology customer base,” Field added.
Reflecting investors’ expectations for continued high growth, AstraZeneca’s share price to earnings ratio stands at 18.9 times, well ahead of rivals except Novo Nordisk and Eli Lilly, which have benefited from sales of weight-loss drugs.
Novo Nordisk, buoyed by sales of its obesity drugs, is Europe’s most valuable company, valued at $580 billion.
But AstraZeneca now has a market capitalisation three times that of its British counterpart GSK, and almost £30bn more than Shell, its closest rival on the VscekSE 100. It is also now bigger than Novartis and on par with Roche, the two Swiss drugmakers.
Central to its growth plans is building on the company’s scientific advances in the treatment of lung, breast and other cancers.
The company also licensed a weight-loss pill from Chinese start-up Eccogene last year, but has lagged behind rivals Novo Nordisk and Eli Lilly in the burgeoning market for obesity treatments.
Continued growth will depend on the ability to address a number of challenges, including the loss of exclusivity for its blockbuster diabetes drug Farxiga and the potential departure of France’s Soriot.
The former Roche executive, who has been in the role since 2012 and secured a controversial pay rise earlier this year, said he had no immediate plans to step down but that work was underway to find a successor.
