Neil Woodford has vigorously defended the merits of his investment in AstraZeneca shares, a day after the stock fell 16 per cent.
Shares in the FTSE 100 stock fell by 16 per cent on 27 July, after the company confirmed the latest trial of its Mystic cancer treatment drug had proved to be unsuccessful.
The shares have failed to recover, and are up less than one per cent today (28 July), meaning Woodford and other investors in the shares continue to sit on a heavy loss.
AstraZeneca is the largest individual investments in the £10bn CF Woodford Equity Income fund, a holding of over 8 per cent.
But the fund manager is sticking to his guns about the investment case for the pharmaceutical giant.
In a statement, Mr Woodford said: “As I have said repeatedly, the investment case for AstraZeneca is about so much more than this one trial. Across a broad spread of disease areas, the company is developing new ground-breaking therapies which have significant commercial potential.
"Much of that is more visible today than at any stage since its chief executive, Pascal Soriot, set out his strategic goal to double sales by 2023. The market remains deeply sceptical that anything like that is remotely possible. Consequently, almost nothing of this potential is priced into the shares.”
Mr Woodford added he doesn’t believe the news of the “failed trial” justifies the 16 per cent drop in the share price.
He also pointed out news of the failure of the Mystic trial had overshadowed two pieces of good news also announced yesterday by AstraZeneca, concerning a positive outcome for another of its cancer drugs, Lynparza.
The second piece of news that Woodford said is important and positive for AstraZeneca is an alliance with rival pharmaceutical firm Merck Woodford said news of this alliance is clearly a “very significant financial deal” for AstraZeneca.