AstraZeneca nears bundle of buyouts to feed ailing pipeline

AstraZeneca ($AZN) aims to do what's necessary to stop the bleeding from the series of R&D disasters and aging blockbusters that have patent protections due to die soon. With a series of biotech buyouts in the plans, the London-based drug giant wants to bail out a sinking ship and sail on with new products. 

In its interview with Martin Mackay, Reuters got the AZ R&D chief to talk up the company's M&A strategy that has been proposed for this year. "We are very actively talking to a number of companies, including potential peer-to-peer and biotech deals," Mackay, a man who's under pressure beef up the pipeline, told Reuters. "I would be very disappointed if we do not do some deals this year that the market will be pleased by."

With AstraZeneca's high interest in the growing diabetes drug market, among other factors, Bernstein's all-star analyst Tim Anderson has indicated that diabetes drugmaker Amylin Pharmaceuticals ($AMLN) would be a tasty morsel for AZ to gobble up in a buyout, estimating the cost of Amylin at $4.5 billion, Reuters reported.

Looking outside the walls of AZ might be a good way to go for the drugmaker, which has one of the industry's worst track records in getting payback from its colossal R&D expenditures. Yet analysts are pushing for AZ's CEO, David Brennan (photo), to shop wisely after the bad $15.6 billion purchase of MedImmune in 2007, and Brennan has proposed to do just that by stringing together a series of deals that are smaller than the MedImmune purchase but large enough to bring the company new products.

As Reuters writes, AZ doesn't have much time to act on its M&A ambitions. The patents for its blockbuster antipsychotic drug Seroquel expire this month, with other drug patents to follow. And deep cuts into its R&D ranks and other areas of the business won't keep the company in the black for very long.

- read the Reuters article

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