Glaxosmithkline Share News (GSK)

(Sharecast News) - Analysts at Jefferies reiterated their 'hold' recommendation for shares of AstraZeneca following the pharma giant's decision to press the pause button on its phase three clinical trial for the Covid-19 vaccine under development alongside the University of Oxford.
The announcement might lead to a short-term stock correction which may prove misplaced, the analysts added.

In particular, they zeroed in on a report in The New York Times, according to which the single trial participant who had sickened was suffering from transverse myelitis, an inflammatory syndrome that affects the spinal cord.

First of all they noted the company's explanation that the pause was a "routine" step whenever a potentially unexplained illness arose in a trial.

Furthermore, an expert with whom they spoke following the announcement had highlighted to them that virus vaccines that utilise adenoviruses - as was the case with AstraZeneca's AZD1222 - enjoyed a substantial and "enviable" safety dataset as they had been used for 60 years with US soldiers.

Nonetheless, that did not mean that new adverse events might not occur given that the adenovirus in question came from chimpanzees, the expert reportedly said.

Hence, the expert judged that the caution shown by AstraZeneca for this severe adverse event was "appropriate and warranted".

They also noted that AstraZeneca had committed to supplying AZD1222 at no profit during the pandemic, although a future commercial opportunity might arise if re-vaccination was required and viable.

"We do not currently include sales or ascribe an [net present value] to AZD1222 given uncertainties, but our assumptions imply c.250p/share (3%)."