|AZ CEO Pascal Soriot|
The dust hasn't settled from the massive layoffs and R&D consolidation announced over at AstraZeneca ($AZN) last week, but analysts have begun to piece together what the major changes mean for the beleaguered pharma giant. And Bloomberg nailed down one emerging theme from the moves CEO Pascal Soriot made last week: The chief wants his company to gain a scientific edge after years of development setbacks led to poor R&D grades.
After AstraZeneca revealed plans to eliminate 1,600 jobs in R&D, Soriot quickly came back days later with news of a broad $420 million collaboration on unproven messenger RNA therapies with the Cambridge, MA-based Moderna Therapeutics. Moderna brings a whole new twist to RNA drugs, proposing to deliver modified messenger RNA into cells, where the molecules would carry instructions for producing therapeutic proteins.
It's bleeding edge stuff. It is also a long way from the market. Yet Soriot appears to be taking the long view on this risky RNA science as he strives to remold AZ as a top innovator in biopharma. "This is not just a one-off," Shaun Grady, vice president of strategic partnering and business development at AstraZeneca, told Bloomberg. "Moderna validates Pascal's philosophy of re-establishing AstraZeneca's scientific leadership."
Smaller biotech companies hunger for deals with major drugmakers, not only to reach into the deep pockets of the pharma set but also for the expertise needed to take their experimental therapies to market. Yet biotech outfits want to know that their large pharma partners have some scientific prowess and are willing to commit long-term to collaborations.
The Moderna deal gives AstraZeneca the credibility to say that it's invested in innovation. And this could give AZ a leg up in partnership talks with biotechs. However, AstraZeneca needs more late-stage assets and products to replenish its stock of drugs, some of which, such as the blockbusters Crestor and Nexium, face patent expirations.
As any pharma industry watcher knows, the company desperately needs more winning drug candidates. So now that Soriot has made his big bet on preclinical Moderna science, the company would be wise to seek some help from a mature biotech player.
- check out Bloomberg's article
Special Reports: AstraZeneca - Biopharma's Top R&D Spenders - 2012 | Pascal Soriot - The 25 most influential people in biopharma today - 2013