Broker snap: Brilinta suggests significant upside for Astra

12th May 2011 12:44

UBS has upgraded drug giant AstraZeneca to a 'buy', from 'neutral', and adds the stock to its 'Key Calls' list on upcoming catalysts, such as the US Food and Drug Administration's (FDA) decision on the group's Brilinta drug.The broker highlights consensus estimates for the impact of the FDA decision on Brilinta (treatment for acute coronary syndromes, or ACS), which suggest a 3% earnings per share (EPS) downside on failure, versus a 3-40% EPS upside on success."After the release of cost effectiveness data for Brilinta, and with key Dapagliflozin (diabetes) catalysts upcoming, we now believe the market may soon incrementally see Astra's longer-term fundamentals as secure," the broker said.UBS predicts that Brilinta - after beating the number two drug in the world, Plavix, on mortality - could capture $2.9bn of the $7.5bn non-US ACS market opportunity in 2015, which could boost core EPS by 10-15%.The target price is hiked to 3,800p, from 3,250p.---BC