Since reaching an all-time high of around 9,200p in the middle of July last year, the AstraZeneca (LSE: AZN) share price has fallen by approximately 22%. I think this is unwarranted. As such, I would invest £5,000 in the pharmaceutical giant today to take advantage of this market opportunity.
AstraZeneca share price opportunity
In the middle of last year, AstraZeneca was riding high after it emerged that the group’s coronavirus vaccine was precisely what the world needed. A cheap, effective jab that could be rolled out across the globe.
Unfortunately, the company was only able to bask in its success for a few months. This year, the group has faced mounting criticism from critical partners such as the European Union. The EU has attacked the organisation for not living up to its contractual obligations to supply vaccines. Meanwhile, the vaccine has been linked to very, very rare blood clots.
But I don’t think these issues should put investors off the business. Astra pledged from the outset not to make excess profits on the jab. It has forgone nearly £15bn in revenue so far thanks to this commitment.
Therefore, I don’t think it will affect the group too much if countries bypass its jab favouring others. On the other hand, a sudden boom in demand won’t have a considerable positive impact on the firm’s bottom line.
As such, I think it could be an excellent time to take advantage of the swooning AstraZeneca share price to buy into the company’s long-term growth story. Indeed, there’s far more to the business than just its Covid vaccine.
As well as vaccines, Astra also manufactures cancer drugs, diabetes treatments and respiratory drugs, among others. I think these will be the core areas of growth for the group over the next few years. Put simply, I’m pretty happy to look past the company’s current vaccine troubles and focus on its long-term potential.
Risks and challenges
That’s not to say that the group does not face any risks and challenges as we advance. In the past, the company has struggled to invest enough in new treatments. Management has tried to rectify this, but it could remain an issue. There are plenty of other enterprises out there willing to spend billions of dollars every year developing new products. Astra needs to keep up, or it could be left behind.
At the same time, legal threats and challenges are a persistent threat to the pharmaceutical industry. Astra is probably more exposed now due to its coronavirus vaccine commitments. A lawsuit from the EU could cost the company a significant sum to fight.
These risks aside, I’m incredibly excited about what the future holds for the AstraZeneca share price. That’s why I would take advantage of the recent weakness in the shares to build a position worth £5k.
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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.