Astrazeneca Axes Another 2300 Jobs
March 21st, 2013 // 5:27 pm @ jmpickett
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Pascal Soirot is working hard to convince investors that AstraZeneca will be a turnaround story. Since arriving last fall from Roche, he hired a new R&D chief as part of an overhaul (see here and here) and is trying to reconfigure global marketing (read this). Today, he outlined his goals on a grander scale and, for good measure, announced another 2,300 jobs will be cut on top of the 1,600 trumpeted earlier this week.
All totaled, the drugmaker is eliminating 5,050 positions when including the 1,150 workers whose jobs are being eliminated as part of a restructuring of Phase III R&D programs announced a year ago, before Soirot arrived. Such cuts reflect the dire straits facing AstraZeneca, which is suffering the familiar one-two punch of meager lab successes and expiring patents on big sellers. And then there has been the disappointment of the MedImmune deal a few years ago.
And so, in advance of an eagerly anticipated meeting with analysts, Soirot declares that “we are making an unambiguous commitment to concentrate our efforts and resources on our priority growth platforms and our priority pipeline projects.†This remark comes from a statement in which the drugmaker emphasizes its larger goals, some of which, of course, are more attainable than others.
For instance, Soirot plans to invest further in emerging markets, notably China, and target “high single-digit revenue growth†each year; exploit the Japanese market; do what it takes to make a success of its diabetes partnership with Bristol-Myers Squibb (BMY); and transform the Brilinta bloodthinner, which has been a disappointing sore spot, into a pot of gold. The drug, he insists, has “multi-billion dollar potential.â€
As for R&D, Soirot listed three overarching areas where the dollars will be spent: respiratory, inflammation and autoimmune diseases; cardiovascular and metabolic diseases, and oncology. Although AstraZeneca (AZN) will continue to invest in infectious diseases and vaccines, as well as neuroscience – areas that some of its rivals, in some cases, are reaping or betting on big returns – “investments will be more opportunity-driven,†he says.
As part of the choreography, AstraZeneca announced two deals today to underscore his notions. One is with the Swedish medical university Karolinska Institutet to create a translational research center for cardiovascular and metabolic disease and regenerative medicine. The other is a deal with Moderna Therapeutics to develop and market messenger RNA treatments for cardiovascular, metabolic and renal diseases. Messenger RNA uses nucleotide analogs that evade the immune response to trigger the body to produce proteins.
As a result, Soirot believes the Phase III pipeline can double in size by 2016 and its Phase II biologics pipeline will yield “a portfolio more weighted towards specialty care,†which is another way of saying that he is aiming for the higher margin treatments that sell for big bucks. A key goal he hopes these efforts will achieve is to exceed forecasts calling for 2018 revenue of $21.5 billion. The combined cuts are expected to save $800 million annually.
To help accomplish all this, AstraZeneca hired Marc Dunoyer executive gp of global portfolio and product strategy, which is a new position. The drugmaker describes this as a “pivotal new role aimed at bringing greater integration across our R&D, commercial and business development activities.†Dunoyer was global head of rare diseases at GlaxoSmithKline (GSK) and chaired the Japanese unit there as well.
Just in case investors were wondering what this will really mean for them, Soirot emphasized that dividends will be maintained and may even grow.
