UPDATED: AstraZeneca chops 2,300 more jobs, narrows R&D focus and adds $420M-plus RNA deal
|AZ CEO Pascal Soriot|
AstraZeneca's new CEO Pascal Soriot has wrapped his review of the Big Pharma company ($AZN) and followed up deep cuts in a global reorganization of the R&D side with a pair of new research initiatives and a decision to chop off another 2,300 jobs, these in sales and administration. Among the new moves announced today is a major $420 million development pact with Moderna Therapeutics, a new upstart biotech that now plans to quickly triple its staff in Cambridge, MA,
In a call with reporters this morning, Soriot outlined a plan to concentrate on three key therapeutic areas, concentrating its R&D efforts on beefing up its late-stage pipeline with promising new treatments and pledging to steer clear of any broad diversification efforts into unrelated areas like OTC or animal health. To that end, AstraZeneca has paid Cambridge, MA-based Moderna--which struck up a relationship with Soriot just months ago, as it was coming out of stealth mode--a $240 million upfront to join forces on risky, pioneering messenger RNA programs in one of the biggest preclinical biotech collaborations in recent times. Another $180 million in milestones will be paid for three key technical achievements with more milestone payments and royalties attached to up to 40 drug candidates in cardiometabolic diseases and select cancer targets.
AstraZeneca has also struck a deal to create a new translational medicine center for cardiovascular, metabolic disease and regenerative medicine at the Karolinska Institutet site in Stockholm, supporting the new center with up to $20 million a year to bankroll its work on new therapies. The center will be open in a matter of months.
For AstraZeneca, Soriot's new game plan amounts to a risky surgical operation, cutting away portions of the ailing patient while trying to save it after years of missteps in the clinic followed by the arrival of generic competition. If Soriot fails, AstraZeneca is likely to slip out of the ranks of the world's top 10 pharma companies.
To avoid that fate, Soriot has decided to narrow the scientific focus of the company while emphasizing the development of specialty medicines.
The three core therapies: respiratory, inflammation and autoimmunity; cardiovascular and metabolic disease and oncology. But infection, vaccines and neuroscience--which has been a disaster zone for R&D--are being pushed to the sidelines. "We will continue to be active in infection and vaccines and in neuroscience, though our investments will be more opportunity-driven," the company said.
"We need to build on our strengths," Soriot told reporters this morning. "This is the most collaborative company I've ever seen," but it's important to "bring in a greater sense of urgency."
First, though, AstraZeneca has to downsize. Add in the 1,600 R&D job cuts announced earlier this week with the 2,300 job cuts announced today and another 1,150 jobs left to be cut from their 2012 reorganization plan, and the pharma giant has another 5,050 pink slips to hand out between now and 2016. The total cost of the restructuring is $2.3 billion.
One of the big focuses at AstraZeneca now will be accelerating the speed of drug development, which is why it's partnering up with Moderna. In the pact, Moderna agreed to shoulder the work of candidate selection, initially for rare diseases and cancer, with AstraZeneca picking and choosing dozens of new therapies for clinical development.
|Moderna CEO Stéphane Bancel|
In partnering with Moderna, AstraZeneca is embracing a bold new science aimed at spurring the development of therapeutics in patients' bodies, using messenger RNA to trigger the production of treatments inside of patients' cells. It's also a new and completely untested method. Moderna emerged from stealth mode just months ago with a $40 million financing round and ambitious plans. And CEO Stéphane Bancel tells FierceBiotech that the big pact with AstraZeneca will help transform the company in a short period of time, He signed a lease for a new building yesterday and says the staff of 32 will quickly swell to about 100.
Bancel adds that he worked out the details of the contract directly with Soriot, repeatedly jumping on the phone since they first talked last December. "He personally drove the negotiations," says Bancel. "We called each other regularly to tweak the deal, working on the contract and drafting. He was a great guy to work with."
Bancel explained that the $180 million in technical milestones relates to demonstrating the potential of the platform to do what Moderna believes it can do. And while he said the exact terms were confidential, there are three milestones worth $60 million each in the deal.
The new pact with Moderna gives AstraZeneca an exclusive deal on new cardiology drugs, says Bancel. But Moderna already has a few of its own oncology programs in the works, with plans to add more now to satisfy AstraZeneca's hunger for cancer drug programs.
Last year AstraZeneca's R&D chief Martin Mackay--recently shown the door as R&D was under review--struck a flurry of new deals with biotechs.But there wasn't much clarity in today's news conference about what new deals may be struck ahead, aside from a mention of new pacts and a focus on bolt-on deals. AstraZeneca may have tipped its hand somewhat with the news that the pharma giant poached GlaxoSmithKline's ($GSK) rare disease specialist Marc Dunoyer as the new business chief.
"Marc will be responsible for driving business strategy, including business development, mergers and acquisitions, portfolio and product strategies," said AstraZeneca in a statement. "His most critical priorities will be to bolster the core growth platforms and therapy areas through well executed business development initiatives and leadership of internal efforts." Presumably there should be a few new rare disease deals in the pipeline as well.
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