Astrazeneca (AZN) stock rose Friday after the company said that its Lynparza drug fared well in clinical trials of its effectiveness as a breast cancer treatment.
Lynparza showed statistically meaningful improvement in survival for patients with germline BRCA mutated breast cancer, the company said. BRCA mutated breast cancer is where a hereditary gene mutates to produce breast-ovarian cancer syndrome in the body.
The announcement came just a day after the FDA granted approval for Siliq, a psoriasis treatment, which triggered a $130 million payment from development partner Valeant Pharmaceuticals (VRX) .
Astra stock rose 2.5% by noon in London to change hands at 4,634 pence each, which compared well against the 0.51% gain for the Stoxx Europe TMI Pharma index, and brought Astra's year-to-date return to 4.8%.
Friday's gain erases losses racked up in the previous session, after Astra went ex-dividend, while the encouraging drug-development news might help to ease recent concerns over earnings momentum at the firm.
"As a reminder the AstraZeneca turnaround story largely hinges on what happens to its oncology portfolio and progress with Lynparza is an important element of that turnaround," said Alistair Campbell, an analyst at Berenberg.
The Anglo-Swedish pharma conglomerate left some investors disappointed in early February when it delivered guidance for core earnings in 2017.
Core earnings per share are expected to be below $4.20, the threshold for long term incentives for CEO Pascal Soriot to vest.
Although psoriasis and breast cancer treatments are an important part of the Astra portfolio, the market is watching closely for the outcome of Mystic trials, an immuno-oncology drug designed to treat lung cancer.