AstraZeneca slumps on Credit Suisse downgrade

The bank said the downgrade reflected the weak overall score for the group in its 2016 PharmaValues Strategic analysis.

“AZN scores poorly on net present value and shows a marked deterioration in pricing power,” it said.

The target price cut reflects lower earnings per share following an assumed delay of at least a year to the US launch of the combination saxagliptin and dapagliflozin diabetes drug, after the US Food and Drug Administration said it would need more clinical data.

“We view saxa/dapa as a key plank of the earnings bridge to AZN’s new pipeline,” said CS.

The bank said AZN offers the greatest exposure to new pipeline, adding that key cancer and respiratory projects are progressing but delays for saxa/dapa, brodalumab and recent heightened safety concerns on AZD 9291 for non small cell lung cancer highlight the risks on such pipeline reliance.

“We expect investors to favour stocks with greater short-term earnings visibility.”

AZN shares were the standout losers on the FSTE 100 and at 1550 BST, they were down 3.1% to 4,030p.