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AstraZeneca shares surge after key drug shows promise in lung cancer trial

FILE PHOTO: The logo of AstraZeneca is seen on medication packages in a pharmacy in London April 28, 2014. REUTERS/Stefan Wermuth/File Photo (Reuters)

By Alistair Smout LONDON (Reuters) - A trial of AstraZeneca's key immunotherapy drug durvalumab showed it reduced disease progression in lung cancer patients, sending the company's shares higher and giving it a lead over rivals as it seeks to transform its oncology business. The trial results are an unexpectedly early boost for the product, known commercially as Imfinzi, which the company hopes will become a blockbuster drug with sales in the billions of dollars. It sets AstraZeneca apart from rivals Merck and Roche , whose equivalent drugs are years behind in the race for similar treatments against lung cancer. Shares in AstraZeneca extended gains to be up by 9.1 percent by mid-afternoon, the top FTSE 100 <.FTSE> riser, hitting its highest level since September 2016 and set for its biggest one day rise since May 2014. Merck fell 1.5 percent, while Roche was up 0.9 percent. AstraZeneca said it was in talks with the authorities over plans for regulatory approval. "These are highly encouraging results for patients with locally-advanced lung cancer for whom surgery is not an option," Sean Bohen, Executive Vice President, Global Medicines Development at AstraZeneca, said in a statement. Analysts said the results of the trial, known as PACIFIC, showed AstraZeneca was ahead of competitors as there was a gap in the market for such treatment. It also augured well for another trial due in mid-2017 which could mean the drug could be used in combination in newly diagnosed cases. "The surprise early positive readout of the PACIFIC trial of... durvalumab (Imfinzi) in locally advanced lung cancer is a major inflection point for AstraZeneca's immuno-oncology," analysts at Deutsche Bank said in a note. "In theory, this could open a market opportunity of $1.75 billion to $3.5 billion (or more) for the drug, which is not included in our current forecasts." RESHAPING THE BUSINESS AstraZeneca is looking to sales of recently launched and experimental cancer medicines to help offset the impact of a loss of patents on blockbusters such as cholesterol pill Crestor. The drug works by helping the body's immune cells kill cancer, offering an alternative to chemotherapy. In this trial it was used after chemotherapy or radiation therapy. Analysts at Berenberg said that trial results, which were earlier than expected, put AstraZeneca ahead of rivals Roche and Merck. The results of their trials for similar treatments aren't expected until September 2019. They also said the efficacy of durvalumab in PACIFIC was a good sign ahead of the results of a trial of the drug in a combination therapy, called MYSTIC. That is used on more advanced cancers, but before or instead of chemotherapy, and results are expected in June or July. "While MYSTIC is still very important, PACIFIC clearly lessens its importance, and provides more reassurance that Imfinzi is an active drug and therefore must have a chance of working in MYSTIC," analysts at Berenberg said. U.S. regulators earlier this month approved durvalumab as a treatment for bladder cancer, marking the first commercial green light for the product. (Reporting by Alistair Smout,; additional reporting by Ben Hirschler in London and Caroline Humer in New York; Editing by Keith Weir)