AZ restructuring will take $1B bite out of R&D
If you dig into AstraZeneca's restructuring announcement this morning, you'll find that the pharma company plans to carve a billion dollars out of its R&D budget between now and 2014. Half of that is a projected cut in costs as it slashes about 3,500 jobs, cuts its slate of core disease targets, outsources more of its work and consolidates "our activities onto a smaller R&D site footprint." The other half reflects a significantly reduced budget going forward.
"After taking account of positions that will be retained whilst being relocated to another site, the investment in new skills and capabilities and further expansion of our biologics activities, the net reduction may be around 1,800 positions," says AstraZeneca's fourth quarter statement.
Even after the restructuring, though, AstraZeneca made clear that it will continue to be an aggressive investor in R&D. "Over the planning period, the company expects that between 40 and 50 percent of its pre-R&D post tax cash flows will be reinvested in internal and external R&D and capital investments to drive future value and growth."