Broker snap: AstraZeneca needs to start delivering, says Panmure

4th Jun 2013 10:24

Panmure Gordon has retained its 'hold' rating and 3,200p target price for biopharmaceuticals group AstraZeneca, saying that the news of the pull-out from fostamatinib should remind investors of the risks that the business carries.Astra announced on Tuesday that it has decided not to pursue regulatory filing for rheumatoid arthritis treatment fostamatinib after mixed results from its clinical trials. As such, the company will incur an impairment charge of $140m in the second quarter.Panmure said that although consensus forecasts for fostamatinib had declined substantially since the unconvincing trial results in December, this news will not help sentiment."Today's news of another phase III product opportunity slipping away should not result in significant downgrades, but reminds investors that the stock carries significant pipeline execution risk," said analyst Savvas Neophytou."With Crestor market exclusivity coming to an end in many territories (coming to a crescendo in 2016 with the US), the company needs to start delivering in its pipeline. A number of assets have been rushed through to pivotal trials and this may spring up nice surprises, but risk remains high in our view."Neophytou said that the share price has had a good run as of late and is up with events. While the stock is trading at a discount to large-cap European peers, he said that this is justified given its "perceived increased forecast risk".The stock was down 0.13% at 3,349p by 11:01 on Tuesday.