Proactive Investors - A phase III clinical trial of a lung cancer drug developed by AstraZeneca PLC and Daiichi Sankyo is expected to show positive results, according to a leading investment bank.
The treatment, called Dato-DXd, is being tested in patients with non-small cell lung cancer (NSCLC) and is aimed at improving progression-free survival (PFS).
JP Morgan believes that the drug will achieve statistically significant and clinically meaningful improvement in PFS compared to chemotherapy and expects at least a two to three-month incremental benefit on PFS.
Numerical trend
The investment bank also anticipates a positive numerical trend in overall survival but expects data to be immature at the headline readout in the first quarter of 2023.
A positive outcome of the phase III trial could significantly boost AZ's bottom line and help the company compete in a crowded and highly competitive market for cancer drugs.
In recent years, several new treatments have been developed for NSCLC, including immunotherapies and targeted therapies.
However, chemotherapy remains the mainstay of treatment for many patients, particularly those with advanced disease.
Dato-DXd has the potential to be an important addition to the treatment armamentarium for NSCLC and could be used in combination with other therapies to improve outcomes for patients.
Outlook
JP Morgan's positive outlook for Dato-DXd is based on the drug's strong performance in earlier clinical trials. Phase Ib TP01 efficacy data for Dato-DXd was "well ahead" of that reported for chemotherapy, according to JP Morgan.
The bank also notes that early phase Ib Dato-DXd TL02 data in first-line NSCLC showed superiority over chemotherapy and that AstraZeneca (NASDAQ:AZN) and Daiichi Sankyo have initiated two phase III studies with Dato-DXd in first-line NSCLC before the headline data from the phase III trial has been released.
In addition, the bank cites the strong performance of Enhertu, a drug that uses the same linker and chemotherapy payload as Dato-DXd, as further evidence of the drug's potential.
Positive read-out?
A positive readout from the phase III trial of Dato-DXd would be a major milestone for AstraZeneca and Daiichi Sankyo and could pave the way for regulatory approval and commercialization of the drug. It would also be a significant step forward in the treatment of NSCLC and could help improve outcomes for patients with this devastating disease.
JPM estimates that Dato-DXd has a peak sales potential of $18 billion, including $14 billion in NSCLC and $4 billion in breast cancer.
Earlier this week the ban raised its price target on AZ to £135 a share (current price £115), and rates the stock ‘overweight’.