Failure to invest enough in finding the next blockbuster drug is a mistake made by pharmaceutical companies that investors take a long time to forgive. It is an error that AstraZeneca has spent the past decade fixing, which has won it a premium valuation from the market.
Pascal Soriot’s ten-year tenure at the top of Britain’s second most valuable public company has been spent slimming down its previously disparate drug portfolio and increasing investment in research and development. The result has been a sales growth outstripping listed peers, a feat that it is expected to repeat. An enterprise value of just under 12 times forward earnings before taxes and other charges is at the top end of the sector.
Drug development is focused on three
