Don't look for AstraZeneca ($AZN) to back away from the deal table anytime soon. While explaining some fresh dents in earnings and revenue for the second quarter, AstraZeneca officials made it clear that they would continue to invest in new products--hitting the accelerator on more dealmaking in an effort to break out of a painful slump brought on by years of star-crossed R&D work and a dwindling pipeline.
|AstraZeneca CEO Pascal Soriot|
Initially, Pascal Soriot's turnaround plan focused a tremendous amount of effort on discovery and early-stage research. The CEO sketched out ambitious plans for a new Cambridge, U.K., headquarters and research campus that would put the company center stage in a thriving research hub. It allied with Moderna Therapeutics, a startup biotech in Cambridge, MA, to send the message that the company would be aggressive about cutting-edge work. And it went on to ink a new slate of academic and early-stage research collaborations.
But all analysts at Standard & Poors and elsewhere could see was a map with a very long and dangerous route to new product approval.
Its second-quarter report, though, makes the case that AstraZeneca has been turning up the heat in late-stage research--even as the company continues to rack up nasty setbacks on its current crop of Phase III prospects.
"Despite the fostamatinib disappointment, the late-stage pipeline in our core therapy areas is growing, and has been further strengthened with the acquisitions of Omthera Pharmaceuticals [$OMTH] and Pearl Therapeutics and the recently announced collaboration with FibroGen," Soriot noted in the Q2 release.
As AstraZeneca snags new deals, its business team is widely rumored to be considering a bid for Onyx ($ONXX), which would deliver new cancer products and add to its oncology pipeline. And yesterday news spread that AstraZeneca is considering a move to buy a stake in Celltrion, following up on Soriot's earlier expressed interest in taking a stab at the biosimilars market. Celltrion already has European support for a knockoff of Remicade--one of the first biosimilars aimed at replacing megablockbuster antibody therapies losing patent protection.
Add it all up and you can see that AstraZeneca has either made a significant change in its turnaround plan or is finally delivering on tougher, pricier deals in the late-stage arena after initially making some big gambles on early-stage efforts. But it's going to take some solid Phase III data and clear regulatory advances if it expects to win a new rep as a winner in the drug-development field.
Turnarounds don't happen overnight. But AstraZeneca's new executive team won't be provided an indefinite honeymoon as long as sales continue to drop.