AstraZeneca shares set to slump after Covid-19 vaccine trial halted
The drug maker is likely to see its share price fall after its Covid-19 vaccine trial was put on hold due to a patient reacting adversely to treatment, but analysts at Jefferies believe a correction may prove misplaced.
- AstraZeneca sees Covid-19 vaccine trial halted after patient falls ill
- Jefferies analysts warn that short-term correction of AstraZeneca may prove misplaced
- Race to find viable vaccine heats up among global drug makers
Following the news, analysts at Jefferies maintained their ‘hold’ rating and left their price target for AstraZeneca unchanged at £80 per share, implying a potential downside for the stock of -4.6%.
And while the US-based investment bank admitted that the pausing vaccine trial with Oxford University may lead to a short-term stock correction, its analysts believe that over the longer term such a move may prove misplaced.
Jefferies’ sentiments are based on the fact that it is considered routine practice to pause clinical trials whenever a patient becomes ill and the action taken was warranted and is largely expected in trials of this nature.
‘We do not currently include sales or ascribe an [net present value] to AZD1222 given uncertainties, but our assumptions imply c.250p/share (3%),’ Jefferies said in a note.
AstraZeneca’s share price will likely bounce back from the recent setback, but the stock has entered into a ‘head and shoulders pattern’, which, if it develops, could see considerable unwinding in terms of the price action that took it to recent all-time highs, according to Jeremy Naylor, analyst and presenter at IG.
WHO says Covid-19 vaccinations not ready until mid-2021
Optimism is high due to the number of vaccinations going to trial at the moment, but the World Health Organisation (WHO) said that many will not be widespread until at least the middle of next year, with many checks required to test the effectiveness and viability of these vaccines.
‘We are really not expecting to see widespread vaccination until the middle of next year,’ WHO spokeswoman Margaret Harris said at a UN briefing in Geneva.
‘This phase 3 must take longer because we need to see how truly protective the vaccine is and we also need to see how safe it is,’ she added.
The race to find a Covid-vaccine
‘The initiation of our clinical study is an important step and brings us closer to a potential vaccine which could help defeat Covid-19,’ Thomas Triomphe, executive vice president and global head of Sanofi Pasteur, said.
‘Our dedicated teams and partner continue to work around the clock as we aim to deliver first results in early December. Positive data will enable a prompt start of the pivotal phase 3 trial by the end of this year,’ he added.
How to trade stocks with IG
- Create an IG trading account or log in to your existing account
- Enter ‘AstraZeneca PLC’ in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.