UBS bullish on AstraZeneca's baxdrostat, cautious on AVANZAR

UBS has increased its peak sales forecast for AstraZeneca's baxdrostat to $4 billion, up from $3 billion, based on positive efficacy data from the BrigHTN study and supportive competitor data; the firm sees baxdrostat as a key catalyst for AstraZeneca to meet its $80 billion revenue target by 2030. While UBS remains optimistic about baxdrostat with a 58% probability of success, it is more cautious regarding the Dato-DXd AVANZAR study in lung cancer, assigning a 25% probability of success despite encouraging early data.

Analysis

UBS has upwardly revised its peak sales forecast for AstraZeneca's baxdrostat to $4 billion, an increase from the previous $3 billion, primarily due to encouraging efficacy data from the BrigHTN study and supportive competitor data from Mineralys’ lorundrostat for aldosterone synthase inhibitors. The investment firm anticipates Phase 3 BaxHTN trial results in Q3 2025 and views baxdrostat, with an assigned 58% probability of success representing a 1.1% net present value, as a key potential contributor to AstraZeneca's $80 billion revenue target by 2030. However, UBS's current forecast for AstraZeneca's 2030 revenue stands at $75.5 billion, reflecting a 5% drug sales growth and 6% overall revenue growth from 2024 to 2030. In contrast, UBS maintains a more cautious stance on AstraZeneca's other significant catalyst, the Phase 3 AVANZAR study of Dato-DXd in first-line non-small cell lung cancer. Despite positive early Phase 1b biomarker data, UBS assigns only a 25% probability of success and $3.7 billion peak sales for AVANZAR (0.8% net present value), though it believes the consensus estimate of $3-4 billion in total Dato-DXd sales can largely be achieved through other indications, independent of AVANZAR's outcome.

Key Decisions for Investors

• Investors should consider the increased $4 billion peak sales potential for baxdrostat as a significant positive for AstraZeneca, and closely monitor the Phase 3 BaxHTN trial results expected in Q3 2025.
• Acknowledge the cautious outlook from UBS regarding the Dato-DXd AVANZAR study, but note that the firm believes overall Dato-DXd sales projections remain achievable through alternative indications, mitigating some risk from this specific trial.
• Factor in UBS's projection that AstraZeneca may reach $75.5 billion in revenue by 2030, slightly below the company's $80 billion target, when evaluating the company's long-term growth trajectory and pipeline execution risk.