AstraZeneca stock drops after lung cancer drug trial setback

(Reuters) -London-listed AstraZeneca shares fell more than 5% on Tuesday after results from the company's lung cancer trials showed that its experimental precision drug did not significantly improve overall survival results for patients.

The stock fell as much as 5.6% to 119.98 pounds in morning trade, with shares, which have gained nearly 18% this year, set for their biggest one-day drop in seven months if losses hold.

The overall survival, or OS rates, in the TROPION-Lung01 trial "did not reach statistical significance", the company said in a presentation at the World Conference on Lung Cancer in San Diego on Monday.

"We expect this update to lead the market to take an (even) more cautious view on Dato TL01 FDA approval by year end," analysts at JPMorgan said in a note.

"We believe underperformance would be a good buying opportunity into 2025, where the company has (the) best in sector line-up of late stage pipeline readouts."

The late-stage trial has been closely watched by investors and analysts who forecast that the drug, known as Dato-DXd, could potentially be another best-selling medicine for AstraZeneca.

The drug belongs to a promising class known as antibody drug conjugates (ADC), which consist of tumour-seeking monoclonal antibodies that are combined with a cell-killing chemotherapy payload. It has been developed jointly with Japan's Daiichi Sankyo.

The stock was the biggest faller on London's main-market index and among the biggest losers on the pan-European STOXX 600 index in morning trade.

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Sonia Cheema, Sherry Jacob-Phillips and Jan Harvey)