8. AstraZeneca


R&D budget: $5.93 billion
Change from 2017: +3%
Total 2018 revenue: $22.1 billion
R&D budget as percentage of revenue: 27%

2018 was a year of transition for AstraZeneca on almost every front. The company returned to sales growth after protracted declines since 2012 amid what was considered the largest patent cliff in the industry, and there were big changes in the location, personnel and structure of its R&D operations.

A crop of new cancer drugs launched in the last few years—EGFR inhibitor Tagrisso (osimertinib) for non-small cell lung cancer, PARP inhibitor Lynparza (olaparib) for ovarian and breast cancer, and immuno-oncology drug Imfinzi (durvalumab)—have driven the recovery and given AZ the breathing space it needed to make some changes to the way it conducts R&D.

During 2018, the company started to rejig its business groups by therapeutic categorycancer in one and cardiovascular, renal and metabolism and respiratory in anotherwith commercial split along the same lines. The idea is to align the R&D and business leadership and have the two working hand in hand to drive growth.

It’s a bold move and triggered some big changes in personnel, including the departure of Chief Medical Officer Sean Bohen, M.D., Ph.D., Chief Commercial Officer Mark Mallon and MedImmune research head Bahija Jallal, Ph.D., among others. Cancer R&D is being headed by former Memorial Sloan Kettering Cancer Center physician José Baselga, M.D., Ph.D., with former head of AZ’s early development unit Mene Pangalos taking the lead on biopharmaceuticals R&D.

One of the biggest consequences of the reshuffle in early 2019 is the retirement of MedImmune as a brand after 30 years. The unit has generated some important products for the group—including Imfinzi and new asthma therapy Fasenra (benralizumab)—but has been criticized for not being productive enough.

2018 saw a few new approvals for AZ—including Lokelma (sodium zirconium cyclosilicate) for hyperkalemia after two prior rejections at the FDA, Lumoxiti (moxetumomab pasudotox) for hairy cell leukemia, and roxadustat, which was unusually approved first in China to treat anemia in chronic kidney disease patients on dialysis.

AZ ended 2018 with 22 projects in late-stage development, a company record, but the bulk of trial readouts and regulatory decisions due this year are new indications for AZ’s established medicines—including a host for Tagrisso, Imfinzi and Lynparza.

In terms of brand-new drugs, the only candidates are PT010 (budesonide, glycopyrronium and formoterol fumarate), AZ’s triple therapy for chronic obstructive pulmonary disease, which is aiming to take on GlaxoSmithKline’s COPD triple Trelegy that was approved in 2017, and selumetinib for rare disease neurofibromatosis.

Among AZ’s highlighted midstage candidates in or heading for phase 3 testing are novel AKT inhibitor capivasertib, which will enter phase 3 in the first half of 2019 for a triple-negative breast cancer and prostate cancer, PT027 (budesonide/albuterol) for on-demand use in asthma, and potential first-in-class TSLP inhibitor tezepelumab for severe asthma.

The list of projects abandoned in 2018 is however pretty extensive. It is headed by the phase 3 MYSTIC and EAGLE trials of Imfinzi and experimental CTLA4 inhibitor tremelimumab, which both missed survival endpoint readouts, plus late-stage failures Eli Lilly-partnered Alzheimer’s disease candidate lanabecestat, another failed amyloid drug, and IL-13 inhibitor tralokinumab for asthma.

Among other programs tossed onto the scrap heap were anifrolumab for lupus, PD-1 inhibitor MEDI0680 as a monotherapy (though it is still in combination trials alongside Imfinzi), a pair of toll-like receptor agonists for asthma, selumetinib for thyroid cancer, and midstage mTOR inhibitor vistusertib for solid tumors.

When it came to licensing deals and M&A, AZ has been more often than not handing rights to its drugs to others as it has tried to focus on fewer, higher-value projects, and it made no acquisitions at all in 2017 or 2018.

Last year’s partnering activities were led by a string of licensing deals for antisense drugs with Ionis for indications such as nonalcoholic steatohepatitis, kidney disease, and Type 2 diabetes, and it also expanded its immuno-oncology alliance with Innate Pharma, claiming rights to first-in-class anti-NKG2A antibody monalizumab and anti-CD39 candidate IPH5201.

The restructuring also saw a shake-up in locations, with a new facility opened in South San Francisco that is bundling five of AZ’s Bay Area sites and around 400 research staff into a single unit. AZ’s flagship headquarters and R&D location in Cambridge, U.K., is however running late with staff migration originally scheduled for 2018 now due later this year.

Check out AstraZeneca’s pipeline here.

8. AstraZeneca

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