March 2, 2010

LONDON, March 2 (Reuters) – AstraZeneca (AZN.L) is to stop researching some disease areas that form the backbone of its current business — including schizophrenia and acid reflux — in a drive to focus R&D efforts and cut costs.

The Anglo-Swedish drugmaker, which faces one of the sector’s worst “cliffs” of expiring drug patents, told its staff on Tuesday it would cease discovery in 10 of its current disease areas, or around one quarter of the total.

A wide-ranging overhaul had been expected since the group said in January it was cutting a further 8,000 staff, or some 12 percent of the workforce, including a net 1,800 in research. But it is only now that staff know where the axe will fall.

AstraZeneca is not alone in taking the knife to previously sacrosanct R&D, though its cuts are particularly deep. Pfizer (PFE.N) and GlaxoSmithKline (GSK.L) are also ditching drug discovery work that does not pay its way. [ID:nLDE61408I]

AstraZeneca will still invest across the same therapy areas but said it would drop discovery in schizophrenia, bipolar disease, depression, anxiety, acid reflux, thrombosis, ovarian and bladder cancers, systemic scleroderma and hepatitis C.

It also plans to end early vaccine research other than for flu and respiratory syncytial virus (RSV).

“AZ is going to continue to be a research-focused company. We will not diversify to the extent that some of the others are doing,” development head Anders Ekblom told Reuters.

“We are focusing on the diseases areas where we would like to be.”


The decision to drop psychiatry drug research reflects the unpredictable and risky nature of clinical trials to assess medicines working on the brain, as well as a lack of good scientific opportunities, he said.

For AstraZeneca, this a major shift, since its second biggest seller is schizophrenia drug Seroquel and it recently struck a deal worth up to $1.24 billion for an antidepressant from Targacept (TRGT.O). [ID:nGEE5B208U]

Ekblom said he remained confident about the Targacept drug, which is shortly to start final Phase III tests, but saw limited longer-term opportunities in the psychiatric field.

His views echo those of Glaxo CEO Andrew Witty, who last month said Glaxo would stop researching antidepressants because of uncertain returns.

The move away from acid reflux ends a line of AstraZeneca drug development that created the stomach ulcer and heartburn treatments Losec and Nexium, its biggest sellers, while exiting thrombosis comes just as its big new blood-thinner hope Brilinta awaits regulatory approval.

Despite the decision to exit certain areas, Ekblom said AstraZeneca would still advance those products already in the pipeline and might also license in drugs, if the opportunity was right.

There will be major changes for staff as the research machine is reorganised.

In the United States, early-stage discovery research will cease at Wilmington, Delaware, while the Swedish research site in Lund will close, as will the British site at Charnwood, as respiratory and inflammation work moves to Moelndal in Sweden.

AstraZeneca also aims to sell its Arrow Therapeutic antiviral business in London, acquired in 2007 for $150 million. (Editing by Jon Loades-Carter)