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Racing to rebuild AZ

Where new CEO could take AstraZeneca, two years into its race to rebuild

AstraZeneca plc's new CEO Pascal Soriot has not yet detailed his vision for the company, but comments last month on his first call with investors coupled with an early move to halt the company's planned share repurchases suggest the pipeline makeovers begun in 2010 are not over.

Over the last two years, late-stage clinical setbacks have forced the pharma to ramp up its business development to shore up its Phase II/III pipeline and aging portfolio. During the same period the company also has revamped its R&D process to drive longer-term growth.

Like just about every other big pharma, AstraZeneca had been relying on a stream of new programs to make up for expiring patents. But a series of clinical setbacks have only made matters worse.

Since 2010, AZ has discontinued at least six registration-stage or Phase II/III programs. Three were in-house programs, and the rest had come from acquisitions, partnerships or in-licensing.

"We've had an unfortunate share of late-stage setbacks. And now we are focused on addressing that through pipeline deals," Shaun Grady, VP of strategic partnering and business development, told BioCentury.

Indeed, deal making has been fast-tracked in 2012. The pharma has done six deals for more than 15 late-stage or commercial programs already this year using a revamped BD strategy that had its genesis in a 2010 restructuring.

The new plan draws on managers from AZ's research, development, commercial, IP and reimbursement teams to evaluate candidates.

The first sign of how well the new BD strategy is working could come as early as 1H14 when Phase III data for lesinurad are expected. AZ gained the gout candidate in its April acquisition of Ardea Biosciences Inc.

In R&D, the 2010 restructuring placed a larger focus on targeted treatments for subgroups of patients and developing agents that deliver far better efficacy than drugs on the market or in the clinic.

A measure of just how much more pipeline filling and R&D reshuffling will be required could come in 1Q13, when Soriot plans to announce his strategic plan.

On the Oct. 25 earnings call, Soriot hinted more pipeline trimming could be in the offing: "We have got a number of assets in the pipeline, and I think there are further choices we can make."

He also highlighted cardiovascular disease, diabetes and emerging markets as potential growth opportunities.

Falling bridges

AZ's portfolio has suffered from generic competition for Nexium esomeprazole and Crestor rosuvastatin, and the loss of exclusivity in March for blockbuster drug Seroquel IR quetiapine for schizophrenia.

AstraZeneca recorded revenues of $29.6 billion in 2007, $31.6 billion in 2008 and $32.8 billion in 2009. Revenues then plateaued, at $33.3

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