AstraZeneca falls past -3.8% and Pfizer is also down in the battle for the pharma anti-cancer market.
The deal announced this morning regarding the participation of U.S drug maker Pfizer and Germany’s Merck on the development of an anti-cancer drug, has sent main competitor, British pharmaceutical company AstraZeneca, on a volatile track, reaching down as much as 3.8% to 4,502, then rising again within an hour back to 4,566.
The deal puts Pfizer in a position of strength against AstraZeneca but also means that the investment in the anti-cancer tumor drug will send earnings expectations down. Pfizer will meet half of the costs of development and commercialization but also reap 50% of revenue rewards. Pfizer’s investment costs amount to $850 million upfront with Merck receiving another $2 billion in milestone payments. The loss on earnings drove Pfizer stocks down on Friday’s close of market after details of the deal were leaked.
In May Pfizer wanted a $118 billion deal with AstraZeneca but the British company rejected the 55 GBP per share offer. Though new rules may enable a renewed bid, market sources are showing little confidence that Pfizer will bid again.
With AstraZeneca’s three consecutive reports of growth this year, high earning’s expectations and its own anti-cancer drug programme, the competition is heating up in the race to find anti-cancer tumor drugs. AstraZeneca will be briefing investors tomorrow on strategy.
Chart from MT4 for AstraZeneca
Chart from MT4 for Pfizer
Trade CFDs for AstraZeneca and Pfizer on STOCK.com with full training given to all clients