Astrazeneca Share Discussion Threads

[philanderer] 14/12/2020 19:26

Hi buywell3 , what stocks, if any, are you holding ? TIA

[buywell3] 14/12/2020 18:57

AZN has had a good run for several years


However there is now risk and a possibility of a RHS shoulder at current prices forming ( top line )

buywell looking at this chart views that if the RHS forms then chart analysis suggests a fall towards the second line


free stock charts from uk.advfn.com

[philanderer] 14/12/2020 18:38

Brokers views:

The deal seems “strategic but somewhat opportunistic”, as analysts at broker Shore Capital put it, or as those from Jefferies said, the motivation of the deal seems to be “bulking-up230;boosting cash flows” and so “perhaps viewed as a defensive move rather than the acquisition of a novel platform technology”.

UBS said that although AZ is a fast moving organisation with high levels of R&D productivity, there is “no reason” why it would be able to deliver better results on Alexion’s pipeline than the US company would on its own.

However, the Swiss bank’s analysts saw geographic rationale to the deal, as AZ makes around a fifth of its sales in China and could leverage its infrastructure there.

So while there is a portion on strategic rationale the UBS analysts said it “looks mostly like a financial deal to us”, as the FTSE 100 group “needs access to cash and cash flow and Alexion delivers that without diluting the top-line trajectory too much”.

“The result may well be more freedom to operate going forward though as cash conversion has been poor and the pro-forma numbers point to margin accretion and better cash generation.

Is the deal good value?

Furthermore, Alexion is being acquired for an undemanding valuation, many analysts agreed.

The NYSE-quoted shares are trading at a 40% forward p/e ratio discount to peers, the Shore Cap team noted, with rare and orphan disease “one of the more compelling growth segments of the market for growth-starved and cash-rich pharma”.

Furthermore, with Alexion estimated to generate around US$1.7bn of cash in 2021 and 2022 step this up to around US$2.2bn in 2023, this suggests the Anglo-Swedish company can afford the extra debt burden relatively comfortably, said UBS, and would de-lever the additional debt burden quickly.

Furthermore, the dividend would not be negatively affected and could be accretive, according to UBS’s estimates, with the dividend current not quite covered in 2021 and tight in 2022.

“The Alexion cash generation would hence allow for more dividend flexibility.”

Citigroup’s analysts said they like the deal “a lot”, with Alexion’s undisturbed market price seen to be 34% below its net present value and a discounted cash flow valuation pointing a fair price of £107 compared with £102 currently.

On the dividend, Alexion’s cash flow contribution “dilutes the risk” to AZ’s Tagrisso from looming competition and should offset the loss of US exclusivity on Farxiga and Brilinta.

Moreover, Citi said the high barriers to biosimilar entry for Soliris and Ultomiris “give AZN’s portfolio greater durability”.


proactiveinvestors.co.uk

[buywell3] 14/12/2020 18:35

These are already dire

Loads of negative values due to HUGE NET DEBT


buying Blockbuster expensive drugs for large monies is all to do with how long the IP lasts in terms of protection and exclusivity of markets

Once that goes the generics come along

[buywell3] 14/12/2020 18:31

buywell opines that the Alexion deal is plan B

plan A was to have a worldwide best selling Covid-19 vaccine in a $10 Billion plus a year growing market

but plan A has stalled

pfizer and soon others will start grabbing an ever bigger market lead and share which


If the vaccines provide circa 6 months immunity or more --- will be hard to break into

[smcni1968] 14/12/2020 18:22

Off the lows and the risk arbitrage selling done. Hopefully our French friend will do a good job convincing the market. There was a similar reaction to buying 50% of the Japanese breast cancer drug a while back now its viewed as a smart move.

[philanderer] 14/12/2020 17:24

Not sure they'll get the AZN shareholders to vote for an increase. Actually not sure they'll vote for the current offer either.

Bad day.

[montyhedge] 14/12/2020 16:28

Yes they expect Astra to come up with more dosh, surely not.

[donald t] 14/12/2020 16:14

Nice rise in the Alexian share price today.

[thamestrader] 14/12/2020 14:47

Although disappointing, todays drop is, IMHO, nothing extraordinary. It is just the next 'lower low' in this descending trajectory. Not that I'm a chartist, obviously. No-one is.

[philanderer] 14/12/2020 14:33

Some analysts think that AstraZeneca is buying Alexion because it basically had to buy someone (anyone!) to shore up its cashflow and avoid missing aggressive earnings growth targets.

That’s the view of Naresh Chouhan, an analyst at Intron Health, a boutique healthcare research firm in London. “We believe there is no strategic rationale other than to buy near-term earnings and cashflow,” Chouhan wrote in a report to his clients on Monday.

That helps explain why some investors, unnerved by the whiff of desperation surrounding the deal, reached for the ejection handle on Monday.

[bogman1] 14/12/2020 14:12

Yes the shares are being diluted but assets are rising. Surely it all balances out...

[montyhedge] 14/12/2020 13:54

I suppose next couple of days will tell us what the market thinks of the deal.

[essentialinvestor] 14/12/2020 13:48

Monty, upgrades to 2021, '22 and '23 EPS from reports.

Remember AZN are issuing new shares on a high multiple

and buying at a far cheaper one.

[montyhedge] 14/12/2020 13:36

6800p I reckon, it's diluting shares in 2021, unless I'm missing something.Part cash, part shares.

[philanderer] 14/12/2020 13:31

EI, thanks for Lex info :-)

[montyhedge] 14/12/2020 13:31

Surely if part of deal offering shares, shareholders will be diluted in 2021. Or I'm I missing something.

[philanderer] 14/12/2020 13:30

AZ's Alexion Acquisition Looks Astute Bit Of Business

Offers $39bn For Rare Disease Drug Pioneer


Executive Summary

Some analysts are suggesting that AstraZeneca is getting hold of a "scarce and high-quality asset" in Alexion for a very reasonable price and shareholders could demand more than the $175 per share offer on the table.

[essentialinvestor] 14/12/2020 13:29

Hi Phil, LEX in the FT positive fwiw, in a nutshell - CEO who has
transformed AZN deserves the benefit of the doubt and debt should be
repaid quickly through cash generation.

If not positive, at least cautiously optimistic ).

[philanderer] 14/12/2020 13:28

Alexion Merger Investigation: Halper Sadeh LLP Announces Investigation Into Whether the Sale of Alexion Pharmaceuticals, Inc. Is Fair to Shareholders; Investors Are Encouraged to Contact the Firm

NEW YORK--(BUSINESS WIRE)

[philanderer] 14/12/2020 13:25

Afternoon EI, agree with that. Alexion shareholders may well ask for an even better price.

[essentialinvestor] 14/12/2020 12:50

What the market is focussed on is the prospect of AZN having to pay more.


SP about flat YTD. The mini parabolic covid run has now fully unwound.

[alphorn] 14/12/2020 12:49

To add to the 'mix' there is also the ability to pay. Eg. Onchocerciasis (river blindness).
A complex subject - enjoyed the dialogue too.

[mayers] 14/12/2020 12:46

Alphorn. It may just be said also that some of the so-called rare diseases are not that rare as they exist more widely in what may be called formes fruste of the conditions. When someone in public life declares an illness personal to themselves as eg, we learnt recently from a politician with Ehlers-Danlos syndrome, we find a whole expansion of those with the entity. Good dialogue however.