Analysts are finding it hard to say anything good about AstraZeneca ($AZN) these days. The pharma giant has experienced back-to-back setbacks on the development front, its late-stage pipeline has left analysts clearly unimpressed and on Thursday the company is expected to post flat earnings--a cardinal sin in the industry. Now the British papers are swarming over speculation that AstraZeneca will counter the skeptics with a fresh round of layoffs and a multibillion-dollar stock buyback.
AstraZeneca began a major restructuring in 2010 with a plan to eliminate 10,000 jobs. Now The Telegraph and other publications are reporting that the company is likely to cut even deeper, with the news landing in its earnings release on Thursday.
While most of the cuts have been aimed squarely at the company's commercial operations, R&D hasn't been spared. The company's 2010 cutbacks included plans to eliminate 1,800 R&D jobs as it consolidated its research sites and efforts.
All the rumors are being driven by the news that regulatory officials batted back AstraZeneca's application for the diabetes drug dapagliflozin, which came on the heels of the news that developers were experiencing big issues with experimental treatments for ovarian cancer and depression. The timing couldn't be worse, as the company has to execute some advances to hold off its loudest critics.
Credit Suisse analyst Luisa Hector told Bloomberg recently that AZ's options are flat running out. And she expects to see the pressure mount on the company to execute a major buyout to help cure what ails it. That pressure will continue to build throughout the week.
Special Report: AstraZeneca - Top 10 pharma layoffs of 2011