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12:00 AM
 | 
Feb 20, 2012
 |  BioCentury  |  Strategy

Externalizing neurology

AstraZeneca creates virtual R&D neurology unit to run cheaper, faster

AstraZeneca plc is betting that significantly downsizing internal R&D in neurology will allow it to run cheaper and faster - and if necessary fail more quickly and cost-effectively - in a disease area that has historically high attrition rates.

The company says its neuroscience investment will continue at current levels despite large headcount reductions, and adopting a new model focused on externalization will give CNS-focused biotechs even more opportunity to collaborate with the pharma.

AstraZeneca this month announced a restructuring that includes a 7,300-person headcount reduction. About 2,200 of this is coming from R&D.

The transition of the neuroscience innovative medicines unit (iMED) to a virtual R&D model is a major component of the R&D revamp. The move is consistent with changes that began in 2010, when AstraZeneca signaled its desire to bring in an increasing percentage of assets from external sources by halting internal discovery in 11 indications, four of which were in neurology.

At the time, the company said it was not uninterested in the indications, but believed better opportunities could be found outside its walls (see BioCentury, March 15, 2010).

The pharma thus is closing two of its neurology R&D sites in Montreal, Quebec, and Sodertalje, Sweden. Although the company would not disclose the current size of its neuroscience iMED, it is reducing the unit to 40-50 people.

EVP of Innovative Medicines Menelas Pangalostold BioCentury AstraZeneca remains "absolutely committed to neuroscience, and we think there is a huge opportunity there; we've just got to do it a bit differently."

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