UPDATED: AstraZeneca cutting 2,200 R&D jobs, slashing neuroscience in restructuring

Hit with sliding profits, a weak late-stage pipeline and a troubling track record on clinical trials, AstraZeneca ($AZN) has decided to trigger another round of layoffs, with 2,200 R&D staffers losing their jobs in this round. Part of a broader reorganization that will eliminate 7,300 jobs, AstraZeneca says that it is cutting way back on neuroscience, reducing the number of investigators it has in the field to a mere 40 or 50 in Boston and Cambridge, U.K. as it creates a new "virtual" group which will collaborate with academic and industry partners around the world.

AstraZeneca now plans to shutter R&D facilities in Soedertaelje in Sweden and Montreal in Canada.

AstraZeneca is joining a major exodus out of brain disorders, a tough field where scientists face extraordinarily high risks in the clinic and an imperfect understanding of many of the diseases. GlaxoSmithKline ($GSK) and Sanofi ($SNY) led the exit with Merck ($MRK) cutting back as well. Alzheimer's, Parkinson's and other conditions affect huge patient populations, raising the prospect that any pharmaceutical advances would swiftly be rewarded with blockbuster returns. Increasingly, though, the fear of high-profile clinical failures has won out over the search for big new drugs in the field, triggering deep worries among patient advocacy groups.

AstraZeneca currently has two late-stage programs underway for experimental neuroscience drugs, both partnered with biotechs. There are another 9 in mid- and early-stage trials. Some of its closest ties have been forged with Nektar Therapeutics ($NKTR)--a $1.5 billion 2009 pact centered on NKTR-118--and Targacept ($TRGT), which is partnered on TC-5214, a depression drug that recently failed the first two of four late-stage studies. Targacept already lost one big partner, GlaxoSmithKline, when it decided to dump its work in the field. The developer, which struck a $1.2 billion deal with AstraZeneca, can't be feeling good about this new move by AstraZeneca.

"We've made an active choice to stay in neuroscience though we will work very differently to share cost, risk and reward with partners in this especially challenging but important field of medical research," says Martin Mackay, the company's R&D chief. "The creation of a virtual neuroscience iMed will make us more agile scientifically and financially - we will be able to collaborate flexibly with the best scientific expertise, wherever it exists in the world."

- here's the press release
- read the story from Dow Jones