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 The British group is hoping to secure a substantial slice of a
multibillion-dollar market by proving its combination of two
immunotherapy drugs, durvalumab and tremelimumab, can help
previously untreated patients with advanced lung cancer.
However, the outcome of the so-called MYSTIC trial may not be clear
cut, given the complex nature of the experiment.
Immunotherapies, which boost the immune system's ability to fight
tumors, promise to revolutionize cancer care, prompting a race among
companies to develop rival treatments. Lung cancer is the single
biggest market opportunity.
Among AstraZeneca's competitors, Merck & Co has already received the
green light to sell a combination of its immunotherapy drug Keytruda
with chemotherapy, while Bristol-Myers Squibb and Roche are also
awaiting important combination drug data.
AstraZeneca has said that initial results from the MYSTIC trial are
due by mid-year, leading many analysts to expect news at the end of
June or early July.
For the company's U.S.-listed shares, where options trade is most
liquid, near-term positions are skewed towards defensive put
options. Among contracts expiring this week and next, which might be
expected to capture the first impact of the trial, there are 3.3 put
options open for each open call option.
Put options convey the right to sell shares at a set price at a
future date and are usually used for bearish bets, while call
options give the right to buy at a certain price at a future date
and are typically used to place bullish bets.
An analysis of options contracts also shows traders expect the
shares to move about 8 percent in either direction by the third week
of July.
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The MYSTIC trial has been a focus for investors because AstraZeneca
Chief Executive Pascal Soriot has invested heavily in oncology to
offset declining sales of older blockbusters such as cholesterol
fighter Crestor and heartburn drug Nexium.
Analysts at UBS, however, said on Tuesday that the market might be
expecting "more clarity, more quickly, than MYSTIC will reasonably
deliver".
The headline results due in the coming days could leave many
questions unanswered. Details on how well treatment extends the time
before cancer worsens, for example, are set to be presented at a
medical congress later this year, while overall survival data may
not be ready until 2018.
The MYSTIC trial will also analyze how the drug combination, or
durvalumab on its own, helps different subsets of patients,
depending on their levels of a protein called PDL-1.
Hopes for AstraZeneca's immunotherapy business received a
significant boost last month when a separate trial showed durvalumab
reduced disease progression in a different group of lung cancer
patients with earlier-stage disease.
(Editing by David Goodman)
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