AstraZeneca hit CEO Pascal Soriot's $45B revenue goal after all. But is Enhertu approaching a plateau?

With $45.8 billion in 2023 revenues, AstraZeneca has met the $45 billion-by-2023 goal CEO Pascal Soriot established in 2014 when he was fending off a takeover bid from Pfizer.

AZ actually “overachieved,” Soriot argued Thursday, because he had previously adjusted that goal to $40 billion based on shifting foreign exchange rates. The British pharma’s 2023 revenue marked a 3% increase compared with 2022’s level, or a 6% increase based on constant exchange rates.

As AZ embarks on the next 10-year cycle, the company will refresh its long-term strategy during an investor event in May. As to whether there will be a new 10-year revenue target, the company hasn’t decided yet, Soriot said.

For now, AZ expects both its total revenue and core earnings per share to increase by low double-digit percentages to low teens percentages in 2024.

Within AZ’s portfolio, the Daiichi Sankyo-partnered antibody-drug conjugate Enhertu is one of the key meds fueling growth lately. In 2023, AZ recorded $1.28 billion in Enhertu revenue, which mainly included its share of profits and royalties in key markets such as the U.S. Combined sales of the drug for the two companies amounted to $2.57 billion in 2023, more than doubling from $1.25 billion the year before.

Enhertu has increased its new-patient share in second-line HER2-positive breast cancer to 60%, while it maintained a 50% share in post-chemo HER2-low breast cancer, Daiichi’s U.S. chief Koji Ogawa said during the Japanese pharma’s earnings call last week.

Despite Enhertu’s leading position in the HER2 space, Daiichi has slightly lowered its U.S. sales forecast for Enhertu in the company's current fiscal year, which ends in March. Besides, the fact that the drug appears to have plateaued in HER2-low market penetration in only about a year after its launch there raises the question of whether the HER2-low opportunity is as big as expected.

During an investor call Thursday, AZ’s oncology business chief Dave Fredrickson acknowledged that Enhertu had reached roughly 50% of new patient share for some time, but he insisted that “there was opportunity to drive continued growth beyond that.”

In second-line HER2-positive breast cancer, Enhertu is largely replacing Roche’s Kadcyla after a head-to-head trial win, Fredrickson said.

“And now we’re moving into some harder yards, but we’re getting traction against it,” he explained.

As for the brand-new HER2-low space, Fredrickson pointed to the need for a “more complicated discussion” with doctors, because multiple therapeutic alternatives exist within what’s traditionally considered the HR-positive, HER2-negative space. In addition, AZ is working on driving testing efforts.

For its part, Daiichi adjusted Enhertu’s sales forecast because it wanted to be “as accurate as possible about the numbers,” a company exec said on a call last week.

“In terms of the future growth, we have no concern at all,” the Daiichi exec said.

New indications could be coming, too. If successful, the DESTINY-Breast06 trial could help move Enhertu to an earlier line of a potentially expanded HER2-low setting, which also includes patients with ultralow levels of the HER2 mutation. The study is expected to read out by June.

Depending on the specific data, the new phase 3 study may allow Enhertu to reach about 25% of HR-positive metastatic breast cancer patients who have even lower HER2 expression than in the current HER2-low indication, or an additional 15% of patients who are true HER2-zero, Fredrickson noted. And moving the drug before chemo in the treatment sequence could also mean longer treatment durations, he added.

In another potential expansion, the FDA just granted priority review to AZ and Daiichi’s tumor-agnostic application for Enhertu, with a decision date set for May 30.

Fredrickson cautioned that even if approved, Enhertu’s initial pan-tumor label might be relatively modest compared with its existing uses. All told, the pan-tumor nod could add “several thousands” of patients across multiple tumor types to Enhertu’s addressable population, Fredrickson said.

For the current application, AZ and Daiichi are targeting traditional HER2-positive tumors regardless of their location. If the companies can demonstrate a benefit in the future in lower levels of HER2 expression, the pan-tumor segment will become an important growth driver for Enhertu, Fredrickson said.

“When you got a brand like Enhertu, which has really exceptional activity across [cancers], I think the philosophy is to make sure that we develop it to the maximum of its potential,” AZ’s oncology R&D chief Susan Galbraith, Ph.D., said on Thursday’s call. “Not everything that we’re planning to do is currently visible, but you’d expect to see other trials.”