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AstraZeneca turns to Beijing CRO as it scrambles to repair damaged pipeline

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Martin Mackay--image courtesy of AstraZeneca

After chopping deep into its R&D operations to scale back on expenses, AstraZeneca ($AZN) has struck a pact to outsource part of its drug discovery operations to a CRO in China. Pharmaron, which only recently snipped the ribbon at its new complex in Beijing, will play a supporting role on chemistry, drug metabolism and pharmacokinetics, and efficacy screening for the pharma giant in a multi-year deal announced over the weekend.

Manos Perros, the head of Infection iMed and sponsor of the collaboration, said that "we believe (the collaboration) will help us progress projects through our R&D pipeline more efficiently. Pharmaron scientists will be integrated into our project teams and play an important role in helping us fulfill our commitment to delivering meaningful medicines to patients worldwide."

AstraZeneca's move to outsource R&D to China comes at a time a host of big players have been shifting their attention and R&D work to the Asian powerhouse, in search of lower cost research operations and better access to one of the world's key emerging drug markets. AstraZeneca isn't the only Big Pharma to cut back on in-house R&D, but it's scrambling to re-order its research operations at a time that R&D chief Martin Mackay has been spearheading an effort to license in more drugs in an effort to quickly fix one of the weakest pipelines in the industry. New CEO Pascal Soriot recently suspended a buyback program for shares as he conserves cash for more deals.   

"We like doing deals in diabetes, and we'd like to do more in Alzheimer's' disease, inflammation," Mackay told Bloomberg in the wake of the China pact. "We like to do in-line and late stage deals--things that are nearer the market so that we can gain revenue."

In addition to a multibillion-dollar deal to license rights to Amylin's diabetes drugs, AstraZeneca has been eagerly following up on pacts with a slate of biotechs. Just a week ago AstraZeneca bagged a Phase IIb-ready compound for chronic kidney disease in a $272 million deal with Fremont, CA-based Ardelyx. The pharma giant agreed to pay $35 million upfront to partner on Ardelyx's lead drug, RDX5791, which spurs the body to bypass vulnerable kidneys when it flushes sodium.

- here's the press release
- read the story from Bloomberg

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