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US regulators finally approve potential blockbuster drug for AstraZeneca

AstraZeneca's headquarters are in Cambridge, UK
AstraZeneca's headquarters are in Cambridge, UK

US regulators have given the green light to a crucial drug in AstraZeneca's pipeline, two years after blocking approval because of concerns over the way it was manufactured, sending shares in the company up by nearly 2pc in morning trading.

Approval for Lokelma, which helps patients with hyperkalaemia, a condition typically associated with chronic kidney disease and chronic heart failure, was important for AstraZeneca because the pharmaceutical company spent $2.7bn in 2015 (equal to £1.78bn at the time) purchasing California-based biopharmaceutical firm ZS Pharma specifically to gain access to the then experimental treatment.

At the time of the acquisition, AstraZeneca said the compound, then known as ZS-9, could become one of the best treatments on the market for hyperkalaemia and lead to global sales of more than $1bn a year. 

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New drug approvals are crucial if AstraZeneca is to achieve its aim of generating $45bn in sales by 2023. It needs new medicines with high sales as some of its existing blockbuster products lose their patents and face generic competition.

Lokelma, which lowers dangerously high potassium levels in the blood, is classed as a drug for cardiovascular and metabolic disease, and therefore fits nicely with AstraZeneca's strategy to prioritise investment in this and two other areas of research: oncology and respiratory.

AstraZeneca 1-day share price
AstraZeneca 1-day share price

However, the path to regulatory success in the lucrative US market was called into question when the US Food and Drug Administration (FDA) issued AstraZeneca a '"complete response letter", or CRL, saying it could not approve Lokelma because of concerns over the way it is manufactured.

Complete response letters are a way for the FDA to communicate with drug companies about why it cannot approve a specific drug in its present form. They allow the regulator to tell pharmaceutical companies what they need to do to get the drug approved.

Sean Bohen, chief medical officer at AstraZeneca, said: "We are pleased by today's FDA approval of Lokelma as it enables us to help address a long-standing clinical need with a new medicine."

Shares in AstraZeneca rose 1.89pc to 5,340p in morning trading, as investors welcomed the news.