AstraZeneca PLC (US) (NYSE:AZN) is on the cusp of unlocking a new growth engine in lung cancer treatment. On September 29, Reuters reported that the company has applied to the US Food and Drug Administration for approval of ORPATHYS-TAGRISSO. But can this potential lung cancer breakthrough meaningfully accelerate AstraZeneca’s broader oncology growth story, or will pressure on established medicines limit the upside?
AZN shares lost about 14% year to date which is probably why it ranked 9th on our list of the 12 Best Beaten Down Growth Stocks To Buy Now.
Lung Cancer Treatment Opportunity
Developed in partnership with HUTCHMED, the combination is designed to treat patients with advanced lung cancer whose disease has progressed during or after treatment with an EGFR-targeted therapy. The opportunity could be meaningful because approximately 34% of tumors develop high levels of MET overexpression or amplification after progression.
Supported by the 338-patient Phase 3 SAFFRON trial, the candidate drug has already demonstrated statistically significant improvements in both progression-free survival and overall survival.
If approved, the drug will expand the use of Tagrisso, one of AstraZeneca’s key oncology medicines. The company recorded a 6% increase in second-quarter sales to $1.94 billion, driven by demand across indications and regions. The drug continues to benefit from strong oncology demand.
Potential approval of ORPATHYS could further strengthen Tagrisso by extending its use to patients whose cancers develop MET-driven resistance after EGFR-targeted treatment. The ORPATHYS-Tagrisso combination is already approved in China for a specified EGFR-mutated lung cancer population, so U.S. approval could expand its geographic reach.
But Tagrisso isn’t AstraZeneca’s only oncology growth driver. Its Enhertu franchise recently cleared a major reimbursement hurdle in England, raising another question: How much additional growth can AstraZeneca unlock from its existing cancer treatments?
Underlying Risk to Watch
First, the FDA still needs to complete its review of AstraZeneca PLC (US) NYSE:AZN)’s application. Although the positive Phase 3 SAFFRON results provide important support, regulators could raise questions about the treatment’s overall benefit-risk profile, safety, or other aspects of the submission.
The addressable patient population is also considerably narrower than Tagrisso’s broader market. AstraZeneca is seeking approval specifically for patients with MET overexpression or amplification whose disease has progressed following EGFR-TKI therapy. As a result, ORPATHYS would target a more defined subset of lung cancer patients rather than the broader EGFR-mutated population treated with Tagrisso.
Another consideration is the potential financial impact. Even if the FDA approves ORPATHYS, the combination is unlikely to alter the current earnings profile in the near term materially. Consequently, the approval could provide a new growth avenue for the oncology franchise without having the same valuation impact as developments involving AstraZeneca’s much larger established products, including Tagrisso.
Cheap Valuation
AstraZeneca closed at $156.90 on October 2, trading at approximately 15x forward earnings and 23.5x trailing earnings. This means AstraZeneca is expected to grow earnings faster than its historical mature-pharma profile.
At approximately 15x forward earnings, AZN’s valuation appears reasonable given its blockbuster medicines, established oncology franchise, and substantial late-stage pipeline. However, further upside depends on sustained earnings growth and successful pipeline execution.
Consequently, AZN offers an opportunity to gain exposure to a company trading at a discount, with management targeting $80 billion in annual revenue by 2030. It translates to about 6.4% annual revenue growth compared to $58.7 billion generated in 2025.
Hedge Fund Positioning
Institutional positioning in AstraZeneca PLC (US) NYSE:AZN) remained relatively stable during the first half of the year. The number of hedge funds holding the stock declined slightly to 55 in the second quarter from 56 in the first quarter.
Among the larger institutional investors were Mediolanum International Funds Ltd., which held a stake worth approximately $92.31 million, and Fayez Sarofim & Co., with a position valued at approximately $34.05 million.
Meanwhile, short interest in AstraZeneca remains relatively low. Short interest stood at approximately 0.13% of the company’s shares, although the number of shares held short increased to 2.09 million as of September 15 from 1.89 million as of August 14.
The Verdict
Potential FDA approval for ORPATHYS represents another opportunity for AstraZeneca PLC (US) NYSE:AZN) to build on Tagrisso’s commercial strength. The positive SAFFRON results provide a clinical foundation for the application, while MET-driven resistance creates a defined patient population that could benefit from the combination.
However, investors should also recognize that the opportunity is narrower than Tagrisso’s existing market, and regulatory approval does not guarantee a material near-term contribution to AstraZeneca’s overall earnings. The key catalysts are therefore the FDA’s review and, if approved, the eventual commercial uptake of ORPATHYS.
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