A Resilient Buy-and-Hold Stock
We officially entered a bear market when the S&P 500 continued to decline in value.
Falling by 23% since January, the index has battled constant pressure in 2022 as multiple issues like interest rate hikes and the war in Ukraine continue to make investors anxious over the future of the economy.
While the near-term prospects look gloomy for most businesses, there are several stocks that could be great buy-and-hold investments for the long term.
One of them is AstraZeneca (AZN), which has been in good shape to weather the turbulent conditions and still managed to generate solid results for its shareholders.
A critical factor in making AstraZeneca a top-performing growth stock is the broad range of drugs contributing to its top line.
The company has several blockbusters that generate over $1 billion in yearly revenue to fund its operations.
Needless to say, diversification is critical to appease investors to assure them that they’re not heavily relying on a single product.
Among the products under development for AstraZeneca, one of the most exciting prospects for this year is Enhertu.
Enhertu was just recommended in the European Union as a form of treatment for high-risk breast cancer patients.
This drug, developed with Japan’s Daiichi Sankyo, is anticipated to become another significant growth driver for AstraZeneca.
Breast cancer is the most widely reported type of cancer in the US. It takes over 40,000 lives annually.
Given the latest development and approval for Enhertu, this drug could potentially cover three times as many patients as the existing standard of care.
With the latest endorsement from the EU, Enhertu is estimated to reach $6.6 billion in peak sales. This is $2.5 billion more than the initial projection for this breast cancer treatment.
Aside from Enhertu, the European Union also endorsed Lynparza. This is another AstraZeneca treatment for breast cancer, which it developed jointly with Merck (MRK).
The expansion of its oncology business bodes well for AstraZeneca since it demonstrates a more diverse pipeline.
In 2021, the company acquired a highly sought-after rare disease biotechnology company, Alexion Pharmaceuticals, in an effort to expand its portfolio.
So far, this bet has paid off, with rare disease revenue from Alexion’s programs reaching a total of $1.7 billion in the first quarter of 2022.
To date, this particular segment comprises more than 15% of the total product revenue of AstraZeneca.
Another key strength of AstraZeneca is its strong pipeline and impressive innovation engine, with the company listing over 180 programs queued for development.
The latest developments in its promising programs involve potential breast and liver cancer treatments. In addition to its oncology lineup, the company is also developing new therapies for asthma.
Recently, the company disclosed the creation of a new R&D center in Massachusetts.
The plan is to establish a site for both AstraZeneca and Alexion’s workforces to integrate and work together. That could mean an expanded program for its rare disease portfolio.
In the first quarter of 2022, AstraZeneca’s renal, metabolism, and cardiovascular segments contributed $2.2 billion in sales, showing off a 14% increase from last year’s performance.
Meanwhile, oncology is still the top business of the company, making up 30% of its revenue of roughly $3.4 billion in the first quarter of the year.
Considering that Enhertu is still in its early phase, this number is expected to climb higher in the coming months.
Clearly, AstraZeneca has multiple growth opportunities within reach this year, making it an exciting stock to own.
Moreover, cancer care represents a continuous demand and will not be suspended for reasons like a recession or inflation.
As a leading oncology company, AstraZeneca is a relatively resilient investment despite the uncertainties.
