AstraZeneca looks to more than double new cancer drugs by 2030

The company’s steady ascent is an example of what it takes to compete in the market for branded cancer medicines, estimated worth $143 billion in 2019 by McKinsey & Co. To keep on climbing, it will need to unseat oncology sales leaders Bristol Myers Squibb Co., Roche Holding AG and Merck & Co., according to a Bloomberg Intelligence ranking. As of 2021, Astra was in sixth place, and it will have to maintain momentum after the death last year of its renowned cancer chief, Jose Baselga.

Growth will come from cutting-edge technologies that harness patients’ own immune systems to fight cancer as well as targeted treatments that can help eliminate the need for standard chemotherapy, Fredrickson said. Recent successes include Enhertu, a breast cancer therapy acquired via a $6.9 billion partnership reached in 2019 with Japanese developer Daiichi Sankyo Co.

Trial results for showing the drug’s potential to treat more patients prompted a rare standing ovation at a key American medical oncology conference last June. By 2026, it will probably be a blockbuster treatment as well, according to analysts surveyed by Bloomberg. Other companies are starting to focus on drugs that share Enhertu’s approach to killing cancer cells.

Sales of cancer drugs account for about a third of the Cambridge-based company’s revenue. The unit “is on a trajectory to be one of the leading -- if not the leading -- therapeutic areas in terms of size and growth,” Fredrickson said.

A short train ride away in London, smaller UK rival GSK Plc is looking to emulate AstraZeneca’s success. Seven years ago, GSK sold its stable of marketed cancer products to Novartis AG in a deal that bolstered its vaccine and consumer health businesses. It held onto its early cancer research projects.

In July, amid pressure from activist shareholder Elliott Investment Management, GSK spun off its consumer health arm, now known as Haleon Plc, and pledged to sharpen its focus on more lucrative innovative medicines.

GSK started its attempt at an oncology turnaround some five years ago, hiring a stable of industry veterans -- including former AstraZeneca executive Luke Miels -- to rebuild the pipeline. In 2018, CEO Emma Walmsley agreed to buy cancer biotech Tesaro Inc. for $5.1 billion, a price investors criticized as high. Those moves haven’t yet translated into sales. In the first half of the year, cancer drugs only accounted for 2% of the company’s revenue, about one-fifth of the sales generated by shingles vaccine Shingrix alone.

“AstraZeneca has been building out a cancer portfolio and arguably is one of the world leaders,” says Susie Jana, London-based analyst for Shore Capital Group Ltd. “GSK has got a ways to go.”

GSK has also poached an Astra dealmaker to scout for promising assets. The recent hire, Chris Sheldon, has faced a suit from Astra to block him from sharing key therapy information with GSK.

Another hire was oncology development chief Hesham Abdullah, who led immuno-oncology at AstraZeneca before joining GSK in 2019. GSK will build its cancer drug business through in-house research as well as partnering deals, he said.

“I saw in GSK what I saw in Astra in 2012, 2013,” Abdullah said on the sidelines of the ESMO conference. “I don’t think anyone says that it’s supposed to be a one, two, three-year turnaround. That’s not what happens. I’ve been through it. It’s like a base camp. It takes some time to slowly climb the mountains.”