AstraZeneca: Oddo BHF neutral on investigation in China

(CercleFinance.com) - Oddo BHF maintains its 'neutral' rating on AstraZeneca shares, with an unchanged target price of 12,500 pence (cp: 1210 pence, +1%).


The analyst reports recent news that AZN's President China is cooperating with local authorities in an ongoing investigation.

According to press reports, the investigation concerns aggressive sales tactics used for at least two of its oncology drugs, the lung cancer treatment Tagrisso and the immunotherapy Imjudo.

According to press reports, the broker reports that for Tagrisso, AstraZeneca employees allegedly helped alter genetic test results so that patients who would not have qualified for reimbursement of the drug - which was only granted to those with a certain genetic mutation - could benefit from insurance coverage.

At this stage, it is difficult to quantify the potential impact of the legal actions. The fall in the share price (around -9%) is equivalent to a loss of market capitalization of around £15bn, or around 3 years of the group's total sales in China, Oddo BHF says.

The analyst adds that the financial impact could be greater, and also points to potential breaches of Chinese data privacy laws, as well as the laboratory's involvement in the importation into China of Imjudo, an unapproved drug used in combination with Imfinzi to combat liver cancer.

The lack of visibility on ongoing investigations naturally puts pressure on the stock, the broker says, which believes that the appointment to the Executive Committee of a person specifically in charge of corruption, fraud and unethical marketing practices would be "relevant".


Copyright (c) 2024 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.