Five areas where AstraZeneca will invest to revive long-term growth
After spending at least $7 billion for late-stage assets in 2012, AstraZeneca plc believes it now has sufficient value in its Phase II/III pipeline to restore long-term growth. The attention of business development is now turning to early stage assets and discovery collaborations with biotech and academics.
Following a six-month review, new CEO Pascal Soriot last month announced his plans to return AZ to recurring growth after clinical setbacks and patent expiries led to declining revenues in 2012.
To accomplish this, Soriot has targeted five "growth platforms" for investment.
Soriot thinks anticoagulant Brilinta ticagrelor can be a cornerstone drug in AZ's portfolio, if it is supported with sufficient resources, based on the drug's positive mortality data vs. standard of care (SOC).
Similarly, AZ will invest heavily in its diabetes partnership with Bristol-Myers Squibb Co. and its respiratory products.
The pharma also plans to increase its investment in emerging markets - where it is making a contrarian bet on its patented drugs over branded generics - and Japan.
Meanwhile, AZ has prioritized six assets from its Phase II pipeline to fast-track into Phase III or pivotal testing, which should double the pharma's Phase III pipeline by 2016 (see "AstraZeneca's Pipeline Fast Track").
A simplification of the organizational structure in both commercial and R&D will put emerging markets under one roof and consolidate R&D to three main sites.
At the company's March 21 investor day presentation, Soriot said the addition of late-stage and commercial assets through business development in 2012 - plus a maturing Phase II pipeline - provided confidence that AZ's portfolio could generate significant growth without the need for diversification or a major acquisition.
"I would describe what you're going to see as an organic strategy," Soriot said. "What that means is essentially we