AstraZeneca's PhIII chief scouts for blockbuster deals as revenue slides

AstraZeneca ($AZN) today had another big round of dismal revenue numbers to explain today. With generic rivals tearing at some of its key franchises, the pharma giant reported a 13% drop in revenue for the first quarter. And AstraZeneca's weakness on the blockbuster front immediately shifted attention to its late-stage pipeline, which is expected to ride to the rescue in the next few years through a combination of savvy R&D work and some inspired blockbuster deal-making.

Briggs Morrison--Courtesy of AZ

Company executives told reporters today that AstraZeneca plans to double the number of late-stage drugs in the pipeline by 2016. This week at BIO, late-stage R&D chief Briggs Morrison told FierceBiotech that the company strategy calls for his group to stay closely focused on its existing crop of late-stage drugs--looking for a break after a long string of setbacks in the clinic--while nurturing its most promising mid-stage programs and tackling "some" bolt-on deals for late-stage therapies.

"We are looking very, very aggressively in cardiovascular/metabolics," says Morrison, a field where AstraZeneca is "very, very light." And he's also scouting for a late-stage program for the respiratory field, another category that fits into the company's big-three disease fields, which also includes oncology.

Morrison, who joined AstraZeneca about a year ago, says he's wide open to doing another deal like Ardea Biosciences ($RDEA), which the pharma giant acquired for $1.26 billion. That deal delivered a late-stage drug for gout which quickly emerged as one of its top prospects. And he says another deal like the one with Amgen ($AMGN), which signed on to partner up five antibodies for inflammatory conditions, or the diabetes pact with Bristol-Myers Squibb ($BMY) could serve as models to bring in new programs.

Pascal Soriot--Courtesy of AZ

"One or more (of the drugs now in the Phase III pipeline) might not make it," Morrison cautions. "That's possible, yes." But the company is going through a "three, four or five year journey" in R&D.

AstraZeneca has been executing a rapid-fire series of deals in early-stage research. A major pact was inked recently with Moderna Therapeutics, which has an untested new platform for drug development, and the Karolinska Institute signed on to partner of a new translational medicine effort focused on cardiovascular/metabolics and regenerative medicine. But discovery stage deals will take years to deliver new programs to the clinic, and analysts are chomping at the bit to see some Phase III promise after an era of failure--which triggered CEO Pascal Soriot's plan to restructure R&D for the third time in just a few years.

It's critically important that Morrison and AstraZeneca get the late-stage pipeline squared away in the near future. If they don't, the company could be headed out of the global top 10, and getting back won't be easy.

- here's the press release on the first quarter (PDF)
- read the report from Bloomberg

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