AstraZeneca: Late-Stage Pipeline Looks Increasingly Well Positioned to Support Long-Term Growth

Following a pipeline review of AstraZeneca's late-stage pipeline, we are increasing the long-term projections for several drugs, including camizestrant (breast cancer), capivasertib (breast cancer), eplontersen (rare disease), and danicopan (rare disease). Based on an evaluation of the drugs' efficacy and side effect profiles relative to the competitive landscape, these drugs look increasingly well positioned to develop into significant new blockbusters for the company. As a result of the increased outlook for the pipeline drugs, we are increasing the firm's U.S. listed share class to $78 from $74, but slightly reducing the local share class fair value to GBX 12,400 from GBX 12,500 as the changes in exchange rates more than offset the increased pipeline projections. As a reminder, we project AstraZeneca's cashflows in U.S. dollars (the same currency used in Astra's financial results) for our discounted cash flow model. We then convert the valuation into pounds for the local share class.