AZN - House of Cards (HOLD, TP £76, 10 pgs)
“Alexion. Why now?”. A question asked by many over the last 24hrs. We have argued in recent notes that AZN have a S-T earnings hole & a medium-term $7bn revenue hole that consensus is underestimating. In good-old AZN fashion, they have financially engineered their way out of it in the S-T but stored up even bigger issues for the future whilst destroying $8bn of value (6% of mkt cap), on our numbers. In addition, they have materially increased the AZN risk profile. For stand-alone AZN we are 9% below 2021 consensus EPS & 13% below in 2025 driven by 3 key factors. We believe the Alexion deal plugs the S-T gap but only exacerbates the post 2025 issues when Brilinta, Farxiga & Lynparza all lose patent expiry and Soliris could face biosimilars. As the market questions “why” in the coming weeks, the EPS & CF issues may come to light.For access to the full note, please contact Naresh Chouhan
AstraZeneca is a holding company. Through its subsidiaries, Co. operates as a biopharmaceutical company engaged in discovering, developing, manufacturing and commercializing its pipeline of small molecule and biologic prescription medicines, including targeted business development through collaboration, in-licensing and acquisitions. Co. is focused on three main therapy areas: Oncology, Cardiovascular and Metabolic Diseases, and Respiratory. Co. is also selectively active in autoimmunity, infection and neuroscience. In addition, Co. works across small molecules, oligonucleotides and other drug platforms, as well as biologic medicines.
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