Profit plunge stokes M&A buzz as AstraZeneca chief vows to strike more deals
|AstraZeneca CEO Pascal Soriot--Courtesy of AstraZeneca|
AstraZeneca ($AZN) has become one of the most active dealmakers in the industry in the months since David Brennan vacated the top post. But after a miserable sales performance in the last quarter--down 19%--the company made it clear that it needed to do a lot more, hinting that big things could be afoot.
"One of the critical things we need to do in the mid-term is to bolster our pipeline and that will rely on business development activities, there is no question about it," new CEO Pascal Soriot told reporters in response to the company's ugly 19% slide in sales.
According to the Telegraph, Soriot highlighted the respiratory market and cancer as two big disease areas it plans to focus on, with a better read on the full strategy in early 2013.
Soriot already had stoked the rumor mill with a quick move to halt the company's stock buyback program, storing cash for deals. There was the deal to license in rights to Amylin's diabetes drugs. Earlier in the week it struck a deal to team with Ironwood ($IRWD) on linaclotide for the China market. There was a $272 million licensing deal for Ardelyx's CKD drug. AstraZeneca started doing deals for its restructured neuroscience group. The company bought Ardea and struck a pact with Regulus.
What's next? Look for lots more multimillion-dollar pacts and perhaps something much, much bigger. The Daily Mail picked up rumors of a potential deal to buy Amarin ($AMRN) so AstraZeneca could gain control of the newly approved Vascepa. Reuters today points to Forest Laboratories ($FRX) and Shire as the kind of sizeable targets that bankers expect to see at the bargaining table.
Just about everything AstraZeneca does now stokes rumors about big moves. AstraZeneca landed 5 million pounds ($8.07 million) from the U.K.'s Regional Growth Fund a few days ago, which it will use to develop a bioscience campus at Alderley Park in Cheshire. The big idea here is that it can mix its R&D staffers with collaborators on site, and there are rumors of hundreds of new jobs for the area.
There's no telling just how long the deal-making spree will last, but it's clear that AstraZeneca has just begun to buy.
As AstraZeneca's new CEO prepares to step in, calls for M&A intensify
Is AstraZeneca angling for a blockbuster Amarin buyout?
Hungry AstraZeneca teams with Ironwood on $150M China drug deal
Charles River is AstraZeneca's latest CRO partner
AstraZeneca bags PhIIb-ready CKD drug in $272M Ardelyx partnership