AstraZeneca Begins Phase 3 Vaccine Trial but Share Price Looks Bearish

AstraZeneca confirmed on Monday that it is the latest company to begin phase 3 trials for a Coronavirus vaccine. The vaccine has been developed in partnership with Oxford University and is supported by the U.S. government. Astra joins Moderna and Pfizer/BioNTec, who have already begun their own late-stage trials.

The drugmaker said its trial will include 35,000 individuals and will include two active or placebo doses, which are delivered four weeks apart. 

In another announcement today, AstraZeneca was given approval by the European Union for its Imfinzi lung cancer treatment, which is given to previously untreated adult patients with extensive-stage small-cell lung cancer. The approval was given following the results of a phase 3 trial.

The London headquartered drug company is up 40% from the mid-March lows and the recent rally was always going to have vaccine-related risk. With the company now trading at a price/earnings ratio of 68x and a price/sales ratio of 5.7x, it may be a good time to reduce weighting in this stock before the results of the upcoming trial. 

Last month also saw rumours of a merger between Astra and Gilead Sciences with the U.K. company making an informal approach about a potential tie-up. The talks are just rumour at the moment but this could be another headwind for the share price if investors see a lengthy, and possibly expensive, integration of the two companies.

AZN Share Price Technical Outlook

The Astrazeneca share price has retreated from a spike high to 10,000 and now trades at 8283. The price has dropped back into a price channel and has bounced off the resistance for a fifth week, so it’s clear that bears are in charge at that level and the stock is now pointing lower. Support is at the June 15th low around 8,120, but the price may move to test the bottom of the price channel at 7,300-7400, which may happen with negative trial news or virus developments.

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