AstraZeneca cancer drug letdown slams stock price

LONDON - Shares in Anglo-Swedish drugmaker AstraZeneca (AZN) plunged 15 percent on Thursday morning in premarket trading on Wall Street after a new lung cancer drug trial did not prove as successful as the company had hoped.

The markets had closely watched the study, known as Mystic, because the company had hoped the drug Imfinzi, would be more effective than chemotherapy. Its failure to meet "endpoints" for progression-free survival is seen as a major setback.

"Despite the outcome of the initial readout, we must be patient as the Mystic trial continues as planned to evaluate overall survival," AstraZeneca CEO Pascal Soriot said.

The company's earnings figures for the second quarter were not rosy, either. Revenue fell amid declining sales of blockbuster drugs Crestor and Seroquel XR, which lost patent protection in the U.S. last year.

Total revenue declined 10 percent to $5.05 billion as sales of the cholesterol drug Crestor fell 40 percent to $560 million. Sales of the antidepressant Seroquel XR dropped 58 percent to $95 million.

Profit for the second quarter was $477 million compared with a loss of $3 million a year earlier as the company reined in costs.

But the news that moved the share price was the less-than-stellar drug trial.

"Analysts have been waiting for the numbers from the Mystic trial for months and had, admittedly tentatively, booked in billions of dollars of future sales from the combination therapy," said Nicholas Hyett, an equity analyst at Hargreaves Lansdown. "Those health care billions will now be going elsewhere."