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What happened

American depositary receipts for AstraZeneca (NASDAQ:AZN) sank 14.2% while the company's London-traded shares dipped 8.2% in October, according to data from S&P Global Market Intelligence. Clinical setbacks for its Brilinta franchise, a mid-stage asthma candidate, and its late-stage cancer immunotherapy made last month especially tough on the British pharma's investors.

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So what

A few years ago AstraZeneca CEO Pascal Soriot stoked hopes that blood thinner Brilinta would contribute $3.5 billion annually to the company's top line. A failure to show a benefit over generic Plavix among patients with peripheral artery disease in a 13,800-patient trial was a step in the wrong direction. First approved for treatment of acute coronary syndrome in 2011, Brilinta experienced first-half 2016 sales growth of 44% over the previous-year period, to an annualized run rate of $790 million. If trials can't show clear benefits in additional patient populations, though, reaching Soriot's lofty revenue forecast seems unlikely. 

A second clinical setback shook confidence for Astra a bit further when the company stopped a mid-stage study with a drug it licensed from Synairgen a couple of years ago. According to the British biotech, a relatively low number of severe asthma exacerbations made it unlikely the drug involved, AZD9412, would show a clear benefit for patients.

AstraZeneca's biggest setback last month came from the FDA in the form of a partial clinical hold for its experimental cancer immunotherapy durvalumab. Regulators stopped a trial for treatment of head and neck cancer after noticing severe bleeding events.

First-half total revenue put AstraZeneca on pace to record about $23.4 billion this year. That's far below the goal of $45 billion by 2023 Soriot set a couple years ago while fending off a takeover attempt from Pfizer. Following the latest string of setbacks, the company's market cap of about $75 billion is roughly 37% below the offer Astra spurned.

Now what

The FDA hold doesn't apply to other studies with durvalumab, but it doesn't bode well for an oncology program that has suffered numerous setbacks recently. Earlier this year tremelimumab failed to show a survival benefit in mesothelioma, a cancer associated with exposure to asbestos and other carcinogens.

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Astra previously touted durvalumab and tremelimumab combination therapy as a cornerstone of its future in immuno-oncology, but the clinical hold in head and neck cancer and tremelimumab's mesothelioma trial failure earlier this year poured water on this strategy.

Last year's approval of Tagrisso for some lung cancer patients was a bright spot in the company's oncology lineup, but suspension of combination trials with the oral lung cancer therapy and durvalumab is another dark cloud over Astra's combination therapy hopes. Even if durvalumab earns an approval soon, its commercialization would be an uphill slog against entrenched competition -- Tecentriq from RocheKeytruda from Merck, and Opdivo from Bristol-Myers Squibb.

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