Headcount: 89,900
Revenues: $45,811 (+3%)
Net Income: $5,061 (+81%)
R&D expenses: $10,935 (+12%)

2023 marked another year of growth for AstraZeneca, which reported a 3% revenue increase to $45.8 billion. Excluding COVID-19 medicines, sales increased by 13% for the year.

All of AstraZeneca’s therapy areas reported double-digit growth, except the vaccines and immune therapies segment, which fell by 72% to $1.3 billion as demand for COVID-19 medicines fell away. Oncology grew by 19%, while the cardiovascular, renal and metabolism (CVRM) unit increased sales by 15%. Respiratory and immunology (R&I) grew 7% while the rare disease business rose by 10%.

With total revenue of $18.4 billion in 2023 the oncology unit respresents 40% of overall total revenue, up from 35% the year before. Sales in the biopharmaceuticals segment decreased by 8% to $18.4 billion, representing 40% of company revenue. The decline was driven by COVID-19 medicines, partially offset by strong growth from Farxiga and respiratory and immunology medicines. CVRM total revenue increased to $10.6 billion and represented 23% of overall company revenue. R&I medicines grew to $6.4 billion of sales and represented 14% of overall revenue. This reflected growth in Fasenra, Tezspire, Breztri and Saphnelo, offsetting a decline in Symbicort.

AstraZeneca has one of the leading development pipelines in the sector and its strength in 2023 was evidenced by first approvals for three new medicines—the first year in its eight-year goal of launching at least 15 new molecular entities (NMEs) between 2023 and 2030.

Airsupra was approved for the first time in January 2023 for use as an as-needed treatment to reduce risk of asthma exacerbations. In November, Truqap in combination with Faslodex was approved for certain patients with advanced HR-positive breast cancer. And, right at the end of 2023, AstraZeneca and Ionis’ Wainua was approved for the treatment of the polyneuropathy of hereditary transthyretin-mediated amyloidosis in adults. It is the only approved treatment that can be self-administered with an auto-injector.

The positive news continued in January 2024 with first approval of Voydeya, a first-in-class oral, Factor D inhibitor developed as an add-on to proven standard of care Ultomiris or Soliris to address the needs of a small subset of patients with paroxysmal nocturnal haemoglobinuria.

In total, AstraZeneca’s pipeline achieved 56 regulatory events during the year, either submissions or approvals for its medicines in major markets, and additionally recorded 30 pipeline progression events, either NME Phase II starts or Phase III investment decisions.

Acquisitions & Expansion

In March 2023, AstraZeneca finalized its acquisition of CinCor Pharma, a U.S.-based clinical-stage biopharmaceutical company focused on developing novel treatments for resistant and uncontrolled hypertension as well as chronic kidney disease.

In November 2023, AstraZeneca launched Evinova, with an ambition to become a leading provider of digital health solutions to better meet the needs of healthcare professionals, regulators and patients. Evinova will prioritize bringing to market established and scaled digital technology solutions already being used globally by AstraZeneca to optimize clinical trial design and delivery. Globally-leading clinical research organizations Parexel and Fortrea have entered into agreements to offer Evinova digital health solutions to their wide customer base.

In December 2023, AstraZeneca acquired Icosavax, a deal that strengthens its late-stage pipeline with Icosavax’s lead investigational vaccine candidate, IVX-A12, a potential first-in-class, Phase III-ready, combination VLP vaccine that targets both RSV and hMPV. RSV and hMPV are both leading causes of severe respiratory infection and hospitalization in adults 60 years of age and older and those with chronic conditions such as cardiovascular, renal and respiratory disease.

AstraZeneca entered another acquisition deal in December with Gracell Biotechnologies, a global clinical-stage biopharmaceutical company developing innovative cell therapies for the treatment of cancer and autoimmune diseases. The acquisition enriches AstraZeneca’s growing pipeline of cell therapies with GC012F, a novel, clinical-stage FasTCAR-enabled BCMA and CD19 dualtargeting CAR-T therapy, a potential new treatment for multiple myeloma, as well as other haematologic malignancies and autoimmune diseases including systemic lupus erythematosus.

In February 2024, AstraZeneca unveiled a $300 million investment in a state-of-the-art facility in Rockville, MD, to establish cell therapy platforms for critical cancer trials and future commercial supply. To align with clinical trial timelines, the site will initially focus on pivotal clinical trial manufacturing of CAR-T cell therapies to meet current clinical supply demand. Over time, the site may expand its focus to support other therapy areas.

Collaborations & Alliances

Absci Corp., a generative AI antibody discovery firm, entered a collaboration with AstraZeneca during the year to deliver an AI-designed antibody against an oncology target. The collaboration will leverage Absci’s Integrated Drug Creation platform and AstraZeneca’s expertise in oncology with the goal of accelerating the discovery of a potential new cancer treatment candidate.

AbelZeta Pharma, a global clinical-stage biopharmaceutical company focused on cell therapies for cancer, inflammatory and immunological diseases, entered into an agreement with AstraZeneca to co-develop C-CAR031, an autologous, armored GPC3-targeting chimeric antigen receptor T Cells (CAR-T) therapy, in hepatocellular carcinoma (HCC).

Presage Biosciences, a translational oncology company that uses CIVO and spatial molecular profiling to understand drug response in the tumor microenvironment (TME), entered an agreement with AstraZeneca to evaluate several investigational bispecific antibody combinations in samples taken from head and neck cancer patients.

AstraZeneca and Eccogene entered into an exclusive license agreement for ECC5004, an investigational oral once-daily glucagon-like peptide 1 receptor agonist (GLP-1RA) for the treatment of obesity, type-2 diabetes and other cardiometabolic conditions.

Cellectis entered into a joint research collaboration agreement and investment agreement with AstraZeneca to accelerate the development of next generation therapeutics in areas of high unmet need, including oncology, immunology, and rare diseases. AstraZeneca will leverage Cellectis’ gene editing technologies and manufacturing capabilities to design novel cell and gene therapy candidate products. As part of the collaboration agreement, 25 genetic targets have been exclusively reserved for AstraZeneca, from which up to 10 candidate products could be explored for development. AstraZeneca will have an option for a worldwide exclusive license on the candidates, to be exercised before IND filing.

Cholesgen Co. Ltd., a biotech/biomedical research company, entered into a collaboration with AstraZeneca, to advance research and development in hypercholesterolemia and related metabolic diseases. The three-year collaboration aims to validate genetic drug targets and progress therapeutic molecules into clinical development.

Quell Therapeutics Ltd., a company that develops engineered T-regulatory (Treg) cell therapies for serious medical conditions driven by the immune system, entered into a collaboration, exclusive option, and license agreement with AstraZeneca to develop, manufacture and commercialize autologous, engineered Treg cell therapies for two autoimmune disease indications.

Headcount: 83,500
Revenues: $44,351 (+19%)
Net Income: $3,293 (n/m)
R&D: $9,762 (flat)

2022 was a year of continued strong performance for Astrazeneca that saw the pharma major’s total revenue increase by 19% to $44.4 billion, with $7.1 billion coming from its Rare Disease portfolio that was recently incorporated into the group’s results mid-2021.

In the U.S., revenue shot up 47% in 2022 while growth in Europe was modest at 9%. At the same time sales in emerging markets fell by 4%, due largely to the anticipated decline in growth in China. This slight drop was offset by 22% growth in Established Rest of World markets during the year.

Oncology revenue increased by 15% in 2022 to $15,539 million and represented 35% of overall total revenue. Performance highlights include 8 new indication launches and 21 major market approvals across four medicines, including Imfinzi, Enhertu, Lynparza and a new medicine approved for the first time, Imjudo.

BioPharmaceuticals revenue increased by 5% for the year to $20,010 million, representing 45% of overall revenue. Growth was driven by strong Farxiga performance and Evusheld revenues offsetting the decline in Vaxzevria, and growth from newer Respiratory & Immunology (R&I) medicines offsetting decreases in Pulmicort and other older R&I medicines.

Rare Disease medicines increased by 4% to $7,053 million, representing 16% of company revenue. Performance was driven by the durability of the C558 franchise, Soliris and Ultomiris growth in neurology indications, Ultomiris gMG launch, and expansion into new markets. Strensiq and Koselugo performances were driven by continued patient demand and geographic expansion.

Key approvals during the year include AstraZeneca and Daiichi Sankyo’s Enhertu, a specifically engineered HER2-directed antibody drug conjugate (ADC). The drug was approved by the U.S. FDA in May 2022 for the treatment of adults with unresectable or metastatic HER2-positive breast cancer who have received a prior anti-HER2-based regimen and have developed disease recurrence during or within six months of completing therapy. The approval was based on positive results from the DESTINY-Breast03 Phase III trial that showed ENHERTU reduced the risk of disease progression or death by 72% versus trastuzumab emtansine (T-DM1).

More recently, following the approval of Airsupra for the treatment of bronchoconstriction and asthma in January 2023, AstraZeneca notified its development partner Avillion of its intention to commercialize Airsupra in the U.S. Under the terms of the agreement with Avillion, AstraZeneca will pay royalties and milestones based on future sales and developments.

Alliances and acquisitions

At the start of the year, in January 2022, Ovid Therapeutics entered into an exclusive license agreement with AstraZeneca for a library of early-stage small molecules targeting the KCC2 transporter, including lead candidate, OV350. The company seeks to optimize and accelerate development of these KCC2 transporter activators in epilepsies and potentially other neuropathic conditions.

In another drug discovery partnership, in November 2022, C4X Discovery and AstraZeneca entered into a licensing agreement to develop an oral treatment for chronic obstructive pulmonary disease (COPD) and other inflammatory and respiratory illnesses. The companies will work to develop C4XD’s NRF2 Activator program with an initial focus on COPD. C4XD received $2 million upfront and is eligible for preclinical milestones of as much as $16 million, as well as another $385.8 million in clinical, commercial milestones and royalties.

For the most part, 2022 was quiet on the acquisition front for Astrazeneca. As the year came to a close, in November it inked a deal to acquire the clinical-stage biotech Neogene Therapeutics in a deal that could be worth up to $320 million. Neogen is focused on developing next-generation T-cell receptor therapies (TCR-Ts) targeting cancer. This deal included an initial payment of $200 million and a further $120 million in potential milestones. Neogene brings expertise in TCR-T discovery, development and manufacturing for cell therapies in solid tumors.

The acquisition engine started to heat up in January 2023, when AstraZeneca agreed to pay $1.3 billion upfront to acquire CinCor Pharma, a U.S.-based clinical-stage biotech focused on developing treatments for resistant and uncontrolled hypertension as well as chronic kidney disease. The acquisition adds CinCor’s candidate drug, baxdrostat (CIN-107), an aldosterone synthase inhibitor for blood pressure lowering in treatment-resistant hypertension. Baxdrostat represents a potentially leading next-generation ASI as it is highly selective for aldosterone synthase and spares the cortisol pathway in humans. The opportunity also brings the potential for combination with Farxiga to provide added benefit across cardiorenal diseases. The deal could be worth up to $1.8 billion if milestones are met.

In another smaller deal meant to bolster its genomics pipeline, Astrazeneca gained technology platforms for the delivery and insertion of genes to address genetic diseases, and a platform to improve viral vector manufacturing. Through its Alexion subsidiary, Astrazeneca entered an agreement to acquire LogicBio Therapeutics for $68 million. Lexington, MA-based LogicBio, is a clinical-stage genomic medicine company with unique technology, experienced rare disease R&D team, and expertise in preclinical development, which will support Alexion’s growth in genomic medicines. LogicBio has developed technology platforms for the delivery and insertion of genes to address genetic diseases, as well as a platform designed to improve viral vector manufacturing processes.

New R&D center and Alexion HQ

In conjunction with the acquisition of Alexion in 2021, AstraZeneca initiated a comprehensive review, aimed at integrating systems, structure and processes of the two organizations.

These activities are expected to be complete by the end of 2025, with a number of activities underway. For instance, in a move that brings together AstraZeneca and Alexion colleagues in a purpose-built facility, AstraZeneca unveiled plans to open a new site at the heart of the Cambridge, MA, life sciences and innovation hub. The new site will be a strategic R&D center for AstraZeneca, as well as Alexion’s new corporate headquarters. The site will bring together approximately 1,500 R&D, commercial and corporate colleagues into a single purpose-built space in Kendall Square, Cambridge, MA.

The site, scheduled for completion in 2026, will be in close proximity to several major academic, pharma and biotech institutions, for greater collaboration and innovation. The move reinforces AstraZeneca’s commitment to the greater Boston area, with over 570,000 square feet of R&D and commercial space, and room for expansion for the future.

Headcount:  76,100
Revenues: $37,417 (+41%)
Net Income: $115 (-96%)
R&D: $9,736 (+62%)

TOP SELLING DRUGS 

In 2021 AstraZeneca’s revenue increased 41% to $37.4 billion. Revenue for the year received a major boost from the $4 billion worth of sales generated by the company’s COVID-19 vaccine, Vaxzevria. Over half of sales ($2.2bn) came from emerging markets, excluding China.

In the fourth quarter of 2021, the company delivered approximately 102 million doses of its COVID-19 vaccine through COVAX. By the end of 2021, the company and its partners had delivered more than 247 million doses with COVAX to 130 countries. As of February 2022, the number of vaccine doses released climbed to 2.6 billion in over 180 countries. Approximately two-thirds of the doses have gone to low- and middle-income countries.

Another highlight of AstraZeneca’s year was the completion of the $39 billion acquisition of Alexion, announced at the end of 2020. The deal to acquire Boston-based Alexion immediately made AstraZeneca a major player in rare diseases. The new rare diseases segment generated 8% of revenue at $3.1 billion. Key drugs gained in the purchase were Soliris and Ultomiris.

In May 2022, AstraZeneca unveiled plans to open a new site at the heart of the Cambridge, MA, life sciences and innovation hub, that will be a R&D center for AstraZeneca, as well as Alexion’s new corporate headquarters. The site, scheduled for completion in 2026, will have over 570,000 square feet of R&D and commercial space, and room for expansion, and will be in close proximity to several major academic, pharma and biotech institutions.

Oncology medicines, which represent AstraZeneca’s largest business segment, grew 19% year-over-year to $13.7 billion, driven by top seller, Tagrisso, which crossed the $5 billion revenue mark for the first time in 2021.

New R&D Discovery Center

In November 2021, AstraZeneca unveiled its new Discovery Center (DISC) in Cambridge, UK. The $1.2 billion state-of-the-art R&D facility includes advanced robotics, high-throughput screening and AI-driven technology. It will support AstraZeneca’s focus on specialized and precision medicines and foster the discovery and development of next generation therapeutics, including nucleotide-based, gene-editing and cell therapies. The new facility houses more than 2,200 scientists.

The DISC will add to AstraZeneca’s R&D presence in more than 40 countries across the globe, including its other research centers in Sweden and the U.S., and development facilities in China and Japan. The company invests more than $7 billion in R&D globally each year, a large part of which takes place in the UK. The center will help further nurture partnerships, develop the next generation of science leaders and accelerate productivity.

Located within the Cambridge Biomedical Campus, the physical proximity of the building’s 19,000 square meter laboratories to leading hospitals, the University of Cambridge, other research institutions and a number of biotech companies will help promote a culture of open partnership and innovation. The company has over 200 active collaborations in the region and more than 2,000 around the world across academia, biotech and industry.

Strengthening the pipeline through partnerships

In September 2021, AstraZeneca entered an agreement to collaborate with VaxEquity for the discovery, development and commercialization of the self-amplifying RNA (saRNA) therapeutics platform developed at Imperial College London. The long-term research collaboration aims to optimize and validate VaxEquity’s saRNA platform and apply it to advance novel therapeutic programs. AstraZeneca will provide VaxEquity with R&D funding and development, approval and sales-based milestones totaling up to $195 million and royalties should AstraZeneca advance any of the research programs into its pipeline. AstraZeneca has the option to collaborate with VaxEquity on up to 26 drug targets and will also make an investment in VaxEquity to further the development of the saRNA platform.

VaxEquity was founded by Imperial College London and Morningside in 2020 based on the innovative saRNA technology developed by Professor Robin Shattock and his colleagues at Imperial College London, UK. saRNA is a new platform for the development of medicines and vaccines which uses similar technology to mRNA but with the added ability to self-amplify, thereby expressing proteins for longer, resulting in higher protein levels per dose level. This has the potential to allow saRNAs to be delivered at lower concentrations than conventional mRNA therapeutics, leading to less frequent or lower dosing, and a broader range of potential applications.

In an acquisition deal, AstraZeneca paid $150 million for Caelum Biosciences, a biotech developing treatments for rare disease, in October 2021. The agreement also provides for additional potential payments to Caelum totaling up to $350 million, payable upon the achievement of regulatory and commercial milestones. At the time of the deal, Caelum had two ongoing Phase 3 clinical trials for CAEL-101, a potentially first-in-class fibril-reactive monoclonal antibody (mAb) for the treatment of light chain (AL) amyloidosis, a rare disease in which misfolded amyloid proteins build up in organs throughout the body, including the heart and kidneys, causing significant organ damage and failure that may ultimately be fatal. CAEL-101 is currently being evaluated in the Cardiac Amyloid Reaching for Extended Survival (CARES) Phase III clinical program in combination with standard-of-care (SoC) therapy in AL amyloidosis. Two parallel Phase III trials in patients with Mayo stage IIIa disease and in patients with Mayo stage IIIb disease respectively are ongoing.

In November 2021, AstraZeneca and Amgen agreed to include AZD8630 in the existing collaboration agreement between the parties. AZD8630 is a human anti-TSLP Fab17 for inhaled delivery and entered Phase I in Q1 2022. AstraZeneca will be the development/regulatory lead, manufacturing lead and commercial lead.

In December 2021, AstraZeneca entered into a new global development and commercialization agreement with Ionis Pharmaceuticals for eplontersen, a ligand-conjugated antisense potential new medicine in Phase III clinical trials for amyloid transthyretin cardiomyopathy (ATTR-CM) and hereditary amyloid transthyretin polyneuropathy (hATTR-PN). AstraZeneca paid Ionis an upfront payment of $200 million and will pay additional conditional payments of up to $485 million following regulatory approvals. The company will also pay up to $2.9 billion of sales-related milestones based on sales thresholds between $500 million and $6 billion.

In January 2022, AstraZeneca entered into an exclusive global collaboration and license agreement with Neurimmune AG for NI006, an investigational human monoclonal antibody currently in Phase Ib development for the treatment of ATTR-CM. Under the agreement, Alexion will be granted an exclusive worldwide license to develop, manufacture and commercialize NI006. Alexion made an upfront payment of $30 million with the potential for additional contingent milestone payments of up to $730 million upon achievement of certain milestones.

Also in January 2022, AstraZeneca entered a licensing deal with Ovid Therapeutics for a library of early-stage small molecules targeting the KCC2 transporter, including lead candidate, OV350, an early-stage compound that has shown encouraging in-vitro and in-vivo proof of concept in resistant forms of epilepsy.

Under a multiyear global agreement, Thermo Fisher Scientific’s clinical sequencing business and AstraZeneca struck a deal to co-develop next-generation sequencing (NGS)-based companion diagnostics (CDx) to support AstraZeneca’s expanding portfolio of targeted therapies. NGS-based companion diagnostics are increasingly used to match patients with new therapies for cancer and other diseases. More than 90 percent of AstraZeneca’s clinical pipeline, across all main areas from oncology, cardiovascular and renal to metabolic and respiratory disease, are targeted precision medicine therapies.

Lastly, Aptamer Group, the developer of Optimer reagents and therapeutics, extended their agreement with AstraZeneca, building upon the existing collaboration to evaluate the potential of using Optimer-based strategies to target renal cells and explore the feasibility of developing next-generation drug delivery vehicles, Optimer-drug conjugates.

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Headcount: 76,100
Revenues: $26,617 (+9%)
Net Income: $3,144 (n/m)
R&D: $5,991 (-1%)

TOP SELLING DRUGS

In 2020, AstraZeneca’s revenue for the year grew 9% to $26.6 billion driven by the performance of new medicines across oncology and biopharmaceuticals, as well as emerging markets. New medicine total revenue improved by 33% to $13.9 billion, including growth in emerging markets of 53% to $2,845 million. Globally, new medicines represented 52% of total revenue.

Sales grew across most regions during the year. Total emerging markets sales increased by 7% to $8.7 billion, with China sales leading the way with 10% growth to $5.4 billion. In the U.S., total revenue increased by 13% to $8.8 billion and in Europe by 10% to $5.5 billion. Japan’s total revenue was $2.6 billion, up 1% from 2019.

Sales growth was reported in two of AstraZeneca’s three therapy areas: Oncology was up 23% to $11.5 billion, while CVRM increased by 3% to $7 billion. Respiratory and immunology declined by 1% to $5.4 billion, a reflection of the impact in China of Covid-19.

Tagrisso remained the company’s top-selling medicine as it continued its global rollout for 1st-line advanced EGFRm non-small cell lung cancer and secured the first global approval in the adjuvant setting in the U.S. in December 2020, based on the unprecedented disease-free survival benefit demonstrated in the ADAURA Phase III trial. Tagrisso also continues to be investigated in the Stage III, unresectable setting (LAURA), in the neoadjuvant resectable setting (NeoADAURA), in combination with chemotherapy in the metastatic setting (FLAURA2), and in combination with potential new medicines to address resistance to EGFR-tyrosine kinase inhibitors.

The oncology segment continued to benefit mostly from newer drugs like Tagrisso, Lynparza and Imfinzi. Still, more established brands performed better than expected, with growth in Zoladex and moderate sales decreases of Faslodex and Iressa due to generic competition in the U.S. and Europe.

In the CVRM sector, 2020 saw label extensions across AstraZeneca’s current brand portfolio, supporting stable performances from its Farxiga franchise across type-2 diabetes and heart failure, and strong launches with roxadustat and Lokelma.

Key growth drivers for the respiratory and immunology segment were Fasenra and Symbicort and, in the late stages of 2020, Breztri Aerosphere (Breztri). Highlights included positive results for the NAVIGATOR Phase III trial of tezepelumab in severe asthma, positive results in the OSTRO Phase III trial in chronic rhinosinusitis with nasal polyps (CRSwNP) for Fasenra and positive results in the ETHOS Phase III trial for Breztri leading to approvals for Breztri for maintenance treatment of chronic obstructive pulmonary disease (COPD) in the U.S. and moderate to severe COPD in the EU.

Acquisitions
In September 2020, AstraZeneca entered into an agreement with Dogma Therapeutics to acquire its preclinical oral PCSK9 inhibitor program. The company aims to take the program forward into clinical development for dyslipidaemia, or abnormal amounts of lipids in the blood, and familial hypercholesterolemia, a common genetic condition that causes high cholesterol.

In December, AstraZeneca and Alexion Pharmaceuticals Inc. entered into a definitive agreement for AstraZeneca to acquire Alexion. AstraZeneca’s acquisition of Alexion, with its strong commercial portfolio and robust pipeline, will support its long-term ambition to develop novel medicines in areas of immunology with high unmet medical needs.

Alexion’s franchise includes Soliris (eculizumab), a first-in-class anti-complement component 5 (C5) monoclonal antibody. The medicine is approved in many countries for the treatment of patients with paroxysmal nocturnal haemoglobinuria (PNH), atypical haemolytic uremic syndrome, generalized myasthenia gravis and neuromyelitis optica spectrum disorder. More recently, Alexion launched Ultomiris (ravulizumab), a second-generation C5 monoclonal antibody with a more convenient dosing regimen. AstraZeneca, with Alexion’s R&D team, will work to build on Alexion’s pipeline of 11 molecules across more than 20 clinical-development programs across the spectrum of indications, in rare diseases and beyond.

The acquisition is also expected to improve the combined Group’s profitability, with the core operating margin significantly enhanced in the short term, and with continued expansion thereafter. The acquisition is expected to close in Q3 2021.

In June 2021, AstraZeneca announced that the Board had appointed Dr. Aradhana Sarin as an executive director and chief financial officer. Sarin is currently executive vice-president, chief financial officer of Alexion. She will report to AstraZeneca’s chief executive officer, Pascal Soriot.

Collaborations and alliances
AstraZeneca works with academia, governments, industry, scientific organizations and patient groups, as well as other pharmaceutical companies, to access the best science to stimulate innovation and accelerate the delivery of new medicines to target unmet medical needs. The company currently has more than 800 collaborations around the world.

Of particular note, AstraZeneca announced a global development and commercialization collaboration agreement with Daiichi Sankyo for DS-1062, Daiichi Sankyo’s proprietary trophoblast cell-surface antigen 2 (TROP2)- directed ADC and potential new medicine for the treatment of multiple tumor types. DS-1062 is currently in development for the treatment of multiple tumors that commonly express the cell-surface glycoprotein TROP2. Among them, TROP2 is overexpressed in the majority of NSCLC and breast cancers tumor types that have long been a strategic focus for AstraZeneca. This collaboration reflects AstraZeneca’s strategy to invest in ADCs as a class, the innovative nature of the technology and the successful existing collaboration with Daiichi Sankyo.

In addition, AstraZeneca recovered the global rights to brazikumab (formerly MEDI2070), a mAb targeting IL23, from Allergan. Brazikumab is currently in a Phase IIb/III program in Crohn’s disease (CD) and a Phase IIb trial in ulcerative colitis (UC). AstraZeneca and Allergan terminated the existing license agreement and all rights to brazikumab reverted to AstraZeneca.

The company also entered a strategic collaboration agreement with OM Pharma SA, through which the company was granted the exclusive right to import, distribute and promote the immunological therapy Broncho-Vaxom (Bacterial Lysates/OM-85) in China. BronchoVaxom can prevent and treat recurrent or acute respiratory infections in patients by boosting host immunity. In China, recurrent respiratory tract infection is a particularly common disease in children.

Covid-19 vaccine and treatment
The largest direct impacts of Covid-19 on AstraZeneca’s portfolio of medicines included reduced sales of Pulmicort in China on fewer nebulization-center visits and reduced elective surgery, and less use globally of infused and injectable medicines, such as Imfinzi and Fasenra. There was also a decline in the number of hospital admissions around the world for the treatment of heart attacks and lower levels of elective percutaneous coronary intervention, adversely impacting sales of Brilinta. Some medicines, however, may have benefited from shifts in patient care and behaviors, including oral medicines such as Calquence, which saw an element of benefit from the substitution from infused-chemotherapy regimens.

AstraZeneca has collaborated to mobilize research efforts to target the SARS-CoV-2 virus, in order to provide protection to societies and people against Covid-19 and to treat patients with severe disease. C19VAZ, developed in collaboration with the University of Oxford, received authorization in December 2020 for emergency supply from the UK Medicines and Healthcare Products Regulatory Agency (MHRA). Additional regulatory decisions have also been granted by regulatory authorities in a number of individual countries, including India, Argentina, Mexico and Morocco, and by the European Medicines Agency (EMA). In February 2021, the World Health Organization’s (WHO) Strategic Advisory Group of Experts on Immunization (SAGE) also recommended C19VAZ for use in individuals 18 years and over, with a preferred dosing interval of eight to 12 weeks.

A rare but serious blood-clotting reaction disrupted the rollout of C19VAZ after 55 deaths were reported in the UK. In response, use of the AstraZeneca jab has been restricted or suspended in more than a dozen countries. Despite this, new data from Public Health England (PHE) in June demonstrated that the vaccine offers high levels of protection against the Delta variant (formerly the ‘Indian’ variant).

AstraZeneca is committed to supplying the vaccine at no profit during the pandemic and will make it available to low-income countries at no profit in perpetuity. So far, it has built supply capacity for billions of doses with agreements spanning more than 180 countries and multiple parallel supply chains across the world.

In addition to C19VAZ, the company has initiated five Phase III clinical trials of AZD7442, a long-acting antibody (LAAB) combination therapy for the prevention and treatment of Covid-19, to evaluate safety and efficacy in preventing infection and treating patients in outpatient and inpatient settings. AstraZeneca has received support of around $486 million from the U.S. Government for the development and supply of AZD7442 under an agreement with the Biomedical Advanced Research and Development Authority (BARDA).

Headcount: 70,600
Revenues: $24,384 (+10%)
Net Income: $1,227 (-40%)
R&D: $6,059 (+2%)

TOP SELLING DRUGS

In 2019 AstraZeneca’s revenue for the year grew 10% to $24.4 billion driven by the performance of new medicines and emerging markets. Sales of new medicines increased by 59% to $9.9 billion, including new medicine growth in emerging markets of 75% to $1.9 billion. New medicines represented 42% of total product sales.

Sales grew across most regions during the year. Total emerging markets sales increased by 18% to $8.2 billion, with China sales leading the way with 29% growth. China sales in the fourth quarter increased by 25% to $1.2 billion. U.S. sales increased by 13% in the year to $7.8 billion while Europe sales declined by 2% in the year to $4.4 billion. Japan delivered strong sales, which increased by 27% to $2.5 billion.

Sales growth was reported across all of AstraZeneca’s therapy areas: Oncology was up 44% to $8.7 billion, new cardiovascular, renal and metabolism (CVRM) sales grew 9% to $4.4 billion and respiratory drug sales were up 10% to $5.4 billion.

The strong oncology performance continued to benefit from new medicines Tagrisso (+71%, $3.2 billion), Lynparza (+85%, $1.2 billion) and Imfinzi ($1.5 billion). In the oncology sector AstraZeneca has recently won regulatory approvals for Calquence and Enhertu, both anticipated to have a positive impact on revenue growth in 2020.

While newer cancer drugs had positive growth, performance from legacy oncology medicines in the year were off. Faslodex faced generic competition in the U.S. and it showed. Sales dropped 13% for the year to $892 million; sales in the fourth quarter alone fell 39%. At the same time, Iressa sales also declined in the year by 18% to $423 million and in the quarter by 29%. AstraZeneca says it anticipates continued declines for both medicines when 2020 results are reported.

In the new CVRM sector, sales increased by 9% in the year to $4.4 billion anchored by the strong growth of Farxiga (+11%, $1.5 billion) and Brilinta (+20%, $1.6 billion). Respiratory sales increased by 10% to $5.4 billion in the year driven by Pulmicort’s 14% growth to $1.5 billion, while Symbicort’s sales fell 3% to $2.5 billion.

As one of the company’s largest regions, at 35% of total product sales, emerging markets sales increased by 18% in the year to $8.2 billion, driven by 29% China sales growth to $4.9 billion.
Oncology sales in emerging markets were up 45% to $2.2 billion. New CVRM sales increased in the sector by 33% to $1.1 billion. Respiratory sales in emerging markets were strong too and grew by 21% to $2 billion.

In November 2019, AstraZeneca announced the creation of a global R&D center in Shanghai, China to carry out R&D for potential new medicines that will more than double the local R&D headcount to around 1,000.

Collaborations and alliances
During the year, AstraZeneca bolstered its cancer drug pipeline when it signed a deal with Daiichi Sankyo for a single cancer drug that could be worth up to $6.9 billion. The global development and commercialization collaboration agreement with Daiichi Sankyo is for Enhertu (DS-8201), a proprietary antibody-drug conjugate (ADC) and potential new targeted medicine for cancer treatment. AstraZeneca and Daiichi Sankyo will jointly develop and commercialize Enhertu worldwide, except in Japan where Daiichi Sankyo will maintain exclusive rights. Daiichi Sankyo will be solely responsible for manufacturing and supply.

AstraZeneca agreed to pay Daiichi Sankyo an upfront payment of $1.35 billion. Contingent payments of up to $5.55 billion comprise up to $3.8 billion for potential successful achievement of future regulatory and other milestones, as well as up to $1.75 billion of potential sales related milestones.

The two companies will share equally development and commercialization costs as well as profits from Enhertu worldwide, except for Japan, where Daiichi Sankyo will incur all costs and AstraZeneca will receive a royalty on sales.

On the cancer research front, AstraZeneca entered a three-year deal with Seres Therapeutics that will focus on advancing mechanistic understanding of the microbiome in augmenting the efficacy of cancer immunotherapy, including potential synergy with AstraZeneca compounds.

During the year, AstraZeneca and BenevolentAI began a long-term collaboration to use artificial intelligence (AI) and machine learning for the discovery and development of new treatments for chronic kidney disease (CKD) and idiopathic pulmonary fibrosis (IPF).

Scientists from the two organizations will combine AstraZeneca’s genomics, chemistry and clinical data with BenevolentAI’s target identification platform and biomedical knowledge graph—a network of contextualized scientific data (genes, proteins, diseases and compounds) and the relationship between them.

Machine learning systematically analyzes data to find connections between facts, and AI-based reasoning is used to extrapolate previously unknown connections. Together, the companies will interpret the results to understand the underlying mechanisms of these complex diseases and more quickly identify new potential drug targets.

Covid-19 vaccine
As this issue went to press, AstraZeneca reached an agreement with Europe’s Inclusive Vaccines Alliance (IVA), spearheaded by Germany, France, Italy and the Netherlands, to supply up to 400 million doses of the University of Oxford’s COVID-19 vaccine, with deliveries starting by the end of 2020.

The IVA aims to accelerate the supply of the vaccine and to make it available to other European countries that wish to participate in the initiative.

AstraZeneca continues to build a number of supply chains in parallel across the world, including for Europe and expanding manufacturing capacity through collaborating with other companies in order to meet its commitment to support access to the vaccine at no profit during the pandemic.

The company has recently completed similar agreements with the UK, U.S., the Coalition for Epidemic Preparedness Innovations and Gavi the Vaccine Alliance for 700 million doses, and it entered a license agreement with the Serum Institute of India for the supply of an additional one billion doses, principally for low- and middle-income countries. Total manufacturing capacity currently stands at two billion doses.

In May, Oxford University announced the start of a Phase II/III UK trial of AZD1222 in about 10,000 adult volunteers. Other late-stage trials are due to begin in a number of countries.

The company’s pandemic response also includes rapid mobilization of AstraZeneca’s global research efforts to discover novel coronavirus-neutralizing antibodies to prevent and treat progression of the COVID-19 disease, with the aim of reaching clinical trials in the next three to five months. Additionally, the company has quickly moved into testing of new and existing medicines to treat the infection, including the CALAVI trials underway for Calquence (acalabrutinib) and the DARE-19 trial for Farxiga (dapagliflozin) in COVID-19 patients.

Headcount: 64,400
Revenues: $22,090 (-2%)
Net Income: $2,050 (-29%)
R&D: $5,932 (+3%)

TOP SELLING DRUGS  

While AstraZeneca’s total revenue for 2018 was off 2% ($22.1 bn) compared to last year, product sales were actually up 4%, climbing to $21.0 billion. The UK-based pharma major also ended the year on a high note, with a strong performance in the fourth quarter, including product sales growth of 5% and total revenue growth of 11%.

Product sales growth for the year can be attributed to the strong performance of new medicines (+81%) and the sustained strength of emerging markets (+12%), particularly China sales, which were up by 28% for the year. Oncology sales increased by 50% with Tagrisso and Lynparza each doubling in sales, along with promising performance from Imfinzi. Asthma drug Fasenra sales reached $297 million in its first full launch year.

Looking further into AstraZeneca’s oncology performance, Tagrisso sales of $1.8 billion represented growth of 95%. Based on its performance in 2018, AstraZeneca anticipates it to be its biggest-selling medicine in 2019. Lynparza sales of $647 million grew 118%, driven by expanded use in the treatment of ovarian cancer and the medicine’s first approvals for use in the treatment of breast cancer. Imfinzi sales of $633 million grew from $19 million the year before, reflecting ongoing launches.

Also in oncology news, AstraZeneca strengthened its development and commercialization collaboration with Innate Pharma in October 2018. The agreement extension enriched AstraZeneca’s immuno-oncology portfolio with preclinical and clinical assets. It obtained full oncology rights to the first-in-class humanized anti-NKG2A antibody, monalizumab. It also gained option rights to IPH5201, an antibody targeting CD39, as well as four preclinical molecules from Innate Pharma’s pipeline. In addition, Innate licensed the U.S. and EU commercial rights to recently FDA-approved cancer drug Lumoxiti, which was launched in the U.S. in the fourth quarter.

On the divestment front, AstraZeneca sold a few pieces of its portfolio at the end of the year to sharpen its focus in oncology. In November, it completed an agreement to divest the prescription medicine rights to Nexium in Europe, as well as the global rights (excluding the U.S. and Japan) to Vimovo, to Grünenthal. AstraZeneca received payments of $700 million for Nexium and $115 million for Vimovo. During the same month AstraZeneca struck a $1.5 billion deal with Sobi for the rights to its infant drug Synagis. In December, it completed an agreement with Covis Pharma to sell its rights to asthma medicine Alvesco, and nasal relief drugs Omnaris and Zetonna, for $350 million.

Drug discovery tie-ups
MedImmune, the global biologics research and development arm of AstraZeneca, entered an exclusive license agreement with Compugen, a provider of predictive discovery and development of first-in-class therapeutics for cancer immunotherapy, for the development of bi-specific and multi-specific immuno-oncology antibody products. Compugen is providing an exclusive license to MedImmune for the development of bi-specific and multi-specific antibody products derived from a Compugen pipeline program. MedImmune has the right to create multiple products under this license and will be solely responsible for all research, development and commercial activities under the agreement.

In other discovery news, AstraZeneca adopted Horizon Discovery’s Edit-R crRNA libraries as part of its initiative to establish a functional genomics discovery platform. AstraZeneca also joined the Genomics Discovery Initiative (GDI), a collaborative functional genomics screening community facilitated by Horizon. AstraZeneca has been evaluating Horizon’s Edit-R human whole genome crRNA library for gene knockout since late 2017, and added the company’s platform of arrayed synthetic crRNA libraries for CRISPR-mediated transcriptional activation (CRISPRa). The libraries offer a tool for functional genomic screens in drug discovery, providing deeper insight into biological mechanisms for the purpose of understanding disease progression, host-pathogen relationships, drug interactions, and pathway analysis.

Also, Bicycle Therapeutics is expanding its collaboration with AstraZeneca to include additional targets in respiratory and cardio-metabolic diseases. The original collaboration was signed in late 2016 and with the expansion has a potential value in excess of $1 billion. Under the terms of the collaboration, Bicycle is responsible for identifying targets for an undisclosed number of respiratory, cardiovascular and metabolic diseases specified by AstraZeneca, while AstraZeneca is responsible for further development and product commercialization.

Lastly, Ionis Pharmaceuticals licensed its Generation 2.5 IONIS-AZ5-2.5 to AstraZeneca. IONIS-AZ5-2.5 is an antisense drug designed to inhibit an undisclosed target to treat a genetically associated form of kidney disease. AstraZeneca is responsible for developing and commercializing IONIS-AZ5-2.5.

AstraZeneca entered a couple clinical collaborations during the year as well. With Bavarian Nordic it formed a new collaboration to investigate CV301, the company’s targeted immunotherapy candidate, and durvalumab (IMFINZITM), AstraZeneca’s PD-L1 inhibitor, in combination with maintenance chemotherapy for patients with metastatic colorectal or pancreatic cancers. Also, Syndax Pharmaceuticals entered a clinical collaboration with AstraZeneca to evaluate the safety and efficacy of durvalumab in combination with SNDX-6352, Syndax’s monoclonal antibody inhibitor of Colony-Stimulating Factor 1 Receptor (CSF1R), across a variety of solid tumors.

Headcount: 61,100
Revenues: $22,465 (-2%)
Net Income: $2,868 (-16%)
R&D: $5,757 (-2%)

TOP SELLING DRUGS 

While revenue was down for the year, AstraZeneca appears to be finally emerging from several years of declining sales. Between 2011 and 2017, the company saw more than $13 billion in lost revenue in established markets for its top selling drugs and expects to lose a further $1 billion in product sales. There’s no doubt the company faces continued challenges with strong competition from both branded and generic medicines, but product sales were up 4% in the fourth quarter of 2017, and 3% in the first quarter of 2018, and long-term prospects remain encouraging. Additionally, Brilinta and Farxiga each exceeded $1 billion in annual sales for the first time.

Newer products, Imfinzi for cancer and Fasenra for severe asthma, both performed well in 1Q18. Oncology sales saw growth of 39%, with Lynparza sales up 109% to $119 million, driven by regulatory approvals in the U.S.; Tagrisso sales grew 98% to $338 million; and Imfinzi sales reached $62 million as a result of the recent U.S. approval for stage III non-small cell lung cancer (NSCLC). Needless to say, this impressive growth was offset by the decline of Crestor sales in Europe and Japan.

AZ launched four new molecular entities in 2017, including its first respiratory biologic medicine, Fasenra and new cancer medicines, Imfinzi and Calquence. Additionally, key existing treatments Lynparza and Tagrisso gained new indications.

AZ and its global biologics R&D arm, MedImmune, won approval of Fasenra (benralizumab) in the U.S. and EU as an add-on maintenance treatment in severe eosinophilic asthma. They also gained FDA approval of Imfinzi for the treatment unresectable Stage III NSCLC, representing the company’s first immuno-oncology approval. Imfinzi is in development across several tumor types, both as monotherapy and with other medicines, and received accelerated approval from the FDA in May for the treatment of advanced bladder cancer. Also, in a recent trial, Imfinzi demonstrated superior progression-free survival (PFS) in NSCLC.

Additional oncology wins include expanded approval for Tagrisso for patients with newly diagnosed, EGFR-positive NSCLC based on results that showed significant PFS benefit (18.9 months versus 10.2 months) compared with standard of care. This past year, Tagrisso became AZ’s highest-selling oncology drug with sales of $955 million (up 126%), and, by the end of 2017, received regulatory approval in more than 60 countries.

AZ and partner Merck gained approval of Lynparza in Japan for use as a maintenance therapy for patients with platinum-sensitive relapsed ovarian cancer, regardless of BRCA mutation status. Lynparza is the first poly ADP-ribose polymerase (PARP) inhibitor to be approved in Japan.

Also, AZ and Acerta Pharma won approval of Calquence (acalabrutinib), a kinase inhibitor for the treatment of mantle cell lymphoma. Calquence was approved under the FDA’s accelerated approval pathway, based on overall response rate.

Moreover, the FDA recently approved Lokelma (sodium zirconium cyclosilicate), formerly ZS-9, for the treatment of hyperkalaemia, a serious condition characterized by high potassium levels in the blood associated with cardiovascular, renal and metabolic diseases. The risk of hyperkalaemia increases significantly for patients with chronic kidney disease and for those who take common medications for heart failure.

In a blow to its late stage pipeline, AZ and Lilly recently discontinued the global Phase III trials of lanabecestat, an oral beta secretase cleaving enzyme (BACE) inhibitor, for the treatment of Alzheimer’s disease (AD). The decision was based on recommendations by an independent data monitoring committee, which concluded that the trials in early and mild AD dementia were not likely to meet their primary endpoints.

The company executed a several strategic ventures this past year, namely MedImmune’s spin out of six molecules from its early-stage inflammation and autoimmunity programs into an independent biotech company, Viela Bio. The new company will focus on medicines for severe autoimmune diseases by targeting the underlying causes of each disease.

MedImmune will contribute three clinical and three preclinical candidates, including inebilizumab, currently in Phase II development for the treatment of neuromyelitis optica, a rare condition that affects the optic nerve and spinal cord. It was granted Orphan Drug Designation in the U.S. and Europe. The transaction doesn’t include anifrolumab, in Phase III development for the treatment of lupus.

AZ also entered a strategic joint venture with the Chinese Future Industry Investment Fund (FIIF) to form an equally-owned, stand-alone company in China to develop and commercialize potential new medicines with the goal of accelerating development efforts. The new company, Dizal Pharmaceutical, has access to the scientific and technical capabilities of AZ’s Innovation Center China, and has exclusive rights to develop and commercialize three preclinical candidates from AZ’s pipeline in the areas of oncology, cardiovascular and metabolic diseases, and respiratory. The FIIF will contribute funding and arrange strategic partnerships.

Additionally, several collaborations from this past year are proving successful. For example, AZ’s global strategic oncology alliance with Merck to co-develop and co-commercialize Lynparza for multiple cancer types. Lynparza is a first-in-class oral PARP inhibitor, and in addition to current indications in breast and ovarian cancer, Lynparza is also being developed across several tumor types, including prostate and pancreatic cancers. The companies are developing Lynparza both as monotherapy and in combination with other potential medicines. The companies are also developing AZ’s selumetinib, a selective inhibitor of MEK, for multiple indications including thyroid cancer.

AZ’s clinical collaboration with Incyte Corp. is also advancing. The alliance was expanded to evaluate the efficacy and safety of epacadostat, Incyte’s investigational IDO1 enzyme inhibitor, in combination with AZ’s Imfinzi, a human monoclonal antibody directed against PD-L1, compared to Imfinzi alone. The exclusive collaboration allows the companies to conduct a Phase III trial in patients with Stage III NSCLC whose disease has not progressed following chemotherapy and radiation therapy.

Finally, another endeavor with Takeda aims to develop MEDI1341, an alpha-synuclein antibody as a potential treatment for Parkinson’s disease (PD). The companies aim to support the development of new PD medicines that seek to remove existing pathological alpha-synuclein aggregates, prevent their formation, or stop them from spreading, and as such potentially prevent or delay the onset of PD, or halt or slow its progression.

With these efforts, sales growth of new drugs, and an advancing pipeline, AZ is on track for a period of recovery in 2018.

Headcount: 59,700
Revenues: $23,002 (-7%)
Net Income: $3,406 (+21%)
R&D: $5,890 (-2%)

TOP SELLING DRUGS   

AstraZeneca rounded out this year’s top ten pharma companies with $23 billion of revenues in 2016. While this is a 5% drop from the previous year, moving forward the company has classified several products and regions as a part of its growth platforms—Respiratory and Diabetes products, Brilinta/Brilique, and the regional sales from emerging markets and Japan. The company also added a new Oncology franchise for the first time to the growth platforms, with its new oncology products, Tagrisso and Lynparza.

Overall, the Cardiovascular and Metabolic Diseases segment is AstraZeneca’s highest revenue-contributing segment, with about 38% contribution of total product sales. Revenues fell 13% to $8.1 billion in 2016 due to the decrease in its Crestor sales following patent expiry and a generic entry in the U.S. Sales of Onglyza in the U.S. declined 10% to $376 million, as the company prioritized Farxiga. A highlight for the segment was the performance of new growth products Brilinta/Brilique whose revenues rose 39% to $839 million during 2016.

The Respiratory segment’s revenues fell 3% to $4.8 billion during 2016, with lower sales of Symbicort and Tudorza/Eklira. This decrease was partially offset by increased revenues of drugs including Pulmicort, Duaklir, and Daliresp. Pulmicort sales of $1 billion were up 5%.

The Oncology segment, which as mentioned above, is now included in the growth platform, includes new products Tagrisso and Lynparza that are expected to drive this segment’s growth in coming years. The segment’s revenues rose 16% to $3.4 billion during 2016, following a strong performance of Tagrisso, Lynparza, Zoladex, and Faslodex. The segment’s revenues were partially offset by lower sales of Iressa and legacy products such as Casodex and Arimidex. Lynparza reported sales of $218 million and was available in 31 countries by end 2016. Iressa sales of $513 million were down 6% as the company prioritized Tagrisso.

The Other segment includes drugs from the Infection, Neuroscience, and Gastrointestinal franchises. This is AstraZeneca’s second-largest revenue contributor, comprising 24% of the company’s total product sales for 2016, which fell 19% during the year. Nexium sales of $2 billion were down 19% and Seroquel XR sales of $735 million were down 28% following loss of exclusivity.

Feeding the pipeline

During the year AstraZeneca, along with its global biologics research and development arm, MedImmune, and Moderna Therapeutics formed a new collaboration to discover, co-develop and co-commercialize messenger RNA (mRNA) therapeutic candidates for the treatment of a range of cancers. The collaboration is in addition to the agreement announced by the companies in 2013 to develop mRNA Therapeutics for the treatment of cardiovascular, metabolic and renal diseases as well as selected targets in oncology. The collaboration combines MedImmune’s protein engineering and cancer biology expertise with Moderna’s mRNA platform. mRNA-based therapies are an innovative treatment approach that enables the body to produce therapeutic protein in vivo, opening up new treatment options for a wide range of diseases that, according to the company, cannot be addressed using existing technologies.

AstraZeneca and Moderna have agreed to collaborate on two specific immuno-oncology programs, based on promising preclinical data, including pharmacology in tumor models. Moderna will fund and be responsible for discovery and preclinical development of product candidates, with the aim of delivering one investigational new drug (IND) application-ready molecule for each of the two programs.

Also during the year, Allergan entered into a global agreement with AstraZeneca to develop and commercialize ATM-AVI, an investigational, fixed-dose antibiotic combining aztreonam and avibactam. The companies will evaluate the combination to treat serious infections caused by metallo βlactamase MBL-producing Gram-negative pathogens, a difficult-to-treat sub-type of carbapenem-resistant Enterobacteriaceae (CRE), for which there are limited treatments. Allergan will maintain commercialization rights in the U.S. and Canada and AstraZeneca will have commercialization rights in all other countries.

ATM-AVI is the first drug candidate to be developed under a public-private partnership agreement between AstraZeneca and the Biomedical Advanced Research and Development Authority (BARDA), a part of the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response (ASPR). The goal of this strategic alliance is to develop a portfolio of drug candidates over the next five years with dual uses in treating illnesses caused by bioterrorism agents and antibiotic-resistant infections.

LEO Pharma formed an agreement with AstraZeneca to acquire the global license to tralokinumab in skin diseases and the exclusive license to brodalumab in Europe. Tralokinumab, an anti-IL-13 monoclonal antibody, has completed a Phase IIb study for the treatment of patients with atopic dermatitis. Brodalumab is an IL-17 receptor monoclonal antibody under regulatory review for patients with moderate-to-severe plaque psoriasis. AstraZeneca received $115 million upfront and is eligible to receive as much as $1 billion in commercial-related milestones and a percentage of royalties on sales. AstraZeneca will manufacture and supply tralokinumab to LEO Pharma and will retain all rights to tralokinumab in respiratory disease and any other indications outside of dermatology.

Eli Lilly and Co. and AstraZeneca entered a worldwide agreement to co-develop MEDI1814, an antibody selective for amyloid-beta 42 (Aβ42) as a potential disease-modifying treatment for Alzheimer’s disease. This agreement expands the collaboration related to AZD3293, a BACE inhibitor in Phase III development.

AstraZeneca and Incyte Corporation formed a collaboration to evaluate the efficacy and safety of Incyte’s Janus-associated kinase (JAK) 1 inhibitor, INCB39110, in combination with AstraZeneca’s next generation epidermal growth factor receptor (EGFR) inhibitor, Tagrisso (osimertinib). The combination will be assessed as a second line treatment for patients with EGFR mutation-positive non-small cell lung cancer (NSCLC), who have been treated with a first generation EGFR tyrosine kinase inhibitor (TKI) and subsequently developed the T790M resistance mutation.

Headcount: 61,500
Revenues: $24,708 (-5%)
Net Income: $2,826 (+129%)
R&D: $5,997 (+7%)

TOP SELLING DRUGS 

Continuing to support is growing biologics portfolio, AstraZeneca, which reported sales of $24.7 billion in 2015, made several significant transactions during the year to bolster its biologics growth strategy. The company laid out plans to invest approximately $285 million in a new high-tech facility for manufacturing of biological medicines in Södertälje, Sweden. The new plant will be focused on filling and packaging of protein therapeutics. It is anticipated that the new facility will supply medicines for clinical trial programs of AstraZeneca and MedImmune, the company’s global biologics research and development arm, from the end of 2018, and will deliver finished products for commercial use once fully operational by 2019.

Södertälje is currently home to AstraZeneca’s largest global tablets and capsules manufacturing facility and is also a launch platform site for the company, with specialist capabilities on-site that allow large-scale production of new medicines, working closely with the research and development organization.

Biotech medicines make up 50% of the company’s pipeline with more than 120 ongoing programs, including more than 30 in clinical development. The new manufacturing facility in Sweden will support the progression of drug candidates across the main therapy areas and be aligned with investments being made in the current biologics manufacturing centers, such as the expansion in Frederick, MD, announced in November 2014.

Expanding its biologics footprint further, AstraZeneca purchased a high-tech biologics bulk manufacturing facility from Amgen, growing its biologics manufacturing capability in the U.S. The Lake Center facility, located in Boulder, CO, is expected to be operational and licensed for commercial production by late 2017. Down the road, the company said this site will eventually double the biologics manufacturing capacity in the U.S. to accommodate its maturing pipeline.

Further supporting its push into biologics, AstraZeneca, through MedImmune, entered into a license agreement and collaboration with Inovio Pharmaceuticals, a biotechnology company developing DNA-based immunotherapies for cancer and infectious diseases. MedImmune acquired exclusive rights to Inovio’s INO-3112 immunotherapy, which targets cancers caused by human papillomavirus (HPV) types 16 and 18. INO-3112, which is in Phase I/II clinical trials for cervical and head and neck cancers, works by generating killer T-cell responses that are able to destroy HPV 16- and 18-driven tumours. These HPV types are responsible for more than 70 percent of cervical pre-cancers and cancers.

MedImmune made an upfront payment of $27.5 million to Inovio as well as potential future payments upon reaching development and commercial milestones totaling up to $700 million. MedImmune will fund all development costs. Inovio is entitled to receive up to double-digit tiered royalties on INO-3112 product sales. MedImmune intends to study INO-3112 in combination with selected immunotherapy molecules within its pipeline in HPV-driven cancers. Emerging evidence suggests that the benefits from immuno-oncology molecules, such as those in MedImmune’s portfolio, can be enhanced when they are used in combination with cancer vaccines that generate tumour-specific T-cells.

During the year MedImmune also formed a strategic alliance with WuXi AppTec to bring research and technical capability for biologics to China. AstraZeneca will have the option to acquire WuXi’s biologics manufacturing facility in Wuxi city in the next few years. Prior to that, WuXi Biologics remains the exclusive partner for R&D manufacturing for MedImmune’s innovative biologics in China. The alliance builds on the existing joint venture between the companies formed in 2012 to develop and commercialize MEDI5117, a biologic for autoimmune and inflammatory diseases. The IND application was subsequently accepted by CFDA for review in March 2015.

WuXi will continue manufacturing for the program at its cGMP facilities. WuXi is building its largest biomanufacturing facility using 14 2000L and two 1000L disposable bioreactors to support late-phase clinical and commercial manufacturing.  The first phase of the facility will be operational in January 2017.

AstraZeneca also formed a three-year collaboration with Orca Pharmaceuticals, a UK-based biopharmaceutical company, to develop inhibitors of retinoic acid–related orphan nuclear receptor gamma (RORγ). Inhibitors of this receptor are believed to have potential against a wide range of autoimmune diseases for which there is currently no safe, orally available and effective treatment.

RORγ plays a key role in the immune system. Specifically, it helps to convert a population of immune cells called CD4+ T cells into T-helper 17 (TH17) cells, which, in turn, produce chemicals (cytokines) that drive the immune response. However, excessive activity of TH17 cells and other RORγ+ immune cells have been implicated in a wide range of autoimmune conditions such as inflammatory bowel disease, psoriasis, arthritis and multiple sclerosis.

AstraZeneca gains access to RORγ inhibitors developed by Orca Pharmaceuticals and will integrate these into its in-house program. Working together, scientists from AstraZeneca and Orca Pharmaceuticals will identify lead compounds from this program for progression and characterize the autoimmune condition to which the lead compounds are best suited. Orca Pharmaceuticals received an upfront payment with potential future milestone payments from AstraZeneca dependent on the success of their RORγ inhibitors in the program with a potential total value of $122.5 million. AstraZeneca has the option to acquire the Orca compounds at the end of the collaboration.

AstraZeneca formed some other collaborations of note in 2015. Together with Pelago Bioscience AB, it entered into a 2-year strategic research collaboration and license agreement. The companies will collaborate on specified joint projects and AstraZeneca will also be granted a license to use and apply the Cellular Thermal Shift Assay (CETSA) for determination and quantification of drug–target interactions in other AstraZeneca discovery projects.

Peregrine Pharmaceuticals expanded its ongoing cancer immunotherapy clinical collaboration with AstraZeneca to include a second, late-stage trial. The companies will now evaluate the combination of Peregrine’s phosphatidylserine (PS)-targeted immune-activator, bavituximab, and AstraZeneca’s anti-PD-L1 immune checkpoint inhibitor, durvalumab (MEDI4736), in a global Phase II study in previously treated squamous or non-squamous non-small cell lung cancer (NSCLC). Peregrine will conduct the randomized Phase II trial.

Valeant Pharmaceuticals’ affiliate entered into a collaboration agreement with AstraZeneca under which Valeant was granted an exclusive license to develop and commercialize brodalumab, an IL-17 receptor monoclonal antibody in development for moderate-to-severe plaque psoriasis and psoriatic arthritis.

Lastly, Charles River Laboratories and AstraZeneca extended their initial three-year partnership for an additional five-year period through 2020. Charles River retains its position as AstraZenca’s preferred strategic partner for outsourced regulated safety assessment and development DMPK (drug metabolism and pharmacokinetics).

Headcount: 57,500
Revenues: $26,095 (+1%)
Net Income: $1,235 (-52%)
R&D: $5,579 (+16%)

TOP SELLING DRUGS 

It was a solid year for AstraZeneca, with total revenue up 1% to $26.1 billion. U.S. revenue was up 4% to $10.1 billion, while Europe sales were down 1% to $6.6 billion. ROW markets were down 4% to $3.5 billion and emerging markets were up 12% to $5.8 billion, the latter, driven by 22% growth in China to $2.2 billion, becoming the company’s second largest national market in 2014.

Also of note, the company achieved a record six product approvals in 2014 as it accelerated its pipeline across all main therapy areas.

During the year, AstraZeneca completed the acquisition of Bristol-Myers Squibb’s (BMS) interests in the companies’ diabetes alliance. The acquisition provides AstraZeneca with 100% ownership of the intellectual property and global rights for the development, manufacture and commercialization of the diabetes business, which includes Onglyza (saxagliptin), Kombiglyze XR (saxagliptin and metformin HCl extended release), Komboglyze (saxagliptin and metformin HCl), Farxiga (dapagliflozin, marketed as Forxiga outside the U.S.), Byetta (exenatide), Bydureon (exenatide extended release for injectable suspension), Myalept (metreleptin) and Symlin (pramlintide acetate).

AstraZeneca paid BMS $2.7 billion of initial consideration and also agreed to pay as much as $1.4 billion in regulatory, launch and sales payments, and various sales-related royalty payments until 2025, $600 million of which relates to the approval of Farxiga in the U.S. The transaction also included the acquisition of 100% of Amylin Pharmaceuticals.

During the year, AstraZeneca also bought the Catalan company, Amirall’s respiratory therapies business, including rights to COPD drug Eklira, which represents 14% of its total sales, paying $875 million initially, and as much as $1.2 billion in development milestones, new product launches and sales.

Probiodrug AG has transferred its experimental cyclin-dependent kinase 9 (CDK9) inhibitor program to AstraZeneca, which also purchased a lead molecule and back-up compounds along with the associated intellectual property. CDK9 has been tied to the regulation of genes involved in proliferation and inflammation, and has been shown to be a promising target for the treatment of cancer and inflammatory diseases.

AstraZeneca also completed the acquisition of Definiens, a company that has pioneered a world-leading imaging and data analysis technology known as Tissue Phenomics, which was designed to improve the identification of biomarkers in tumors.

Definiens’ proprietary Cognition Network Technology was developed by Professor Gerd Binnig, the 1986 Nobel Laureate in Physics, and unlocks information from cancer tissue samples by measuring the identity, locations and the relationships between the many and varied components of the complex tumor microenvironment.

AstraZeneca acquired 100% of Definiens’ shares for an initial consideration of $150 million and may make additional predetermined milestone payments of as much as $150 million.

The acquisition strengthens AstraZeneca’s focus on the discovery of novel predictive biomarkers in immuno-oncology. It is believed that using biomarkers to select patients for clinical trials could potentially shorten clinical timelines and increase response rates.

Pfizer’s efforts to acquire AstraZeneca seemed to turn into nothing at the start of 2015. Having had a rough and tumble in 2014, the start of the new year hasn’t been easy. The company’s cash-cow Crestor is on a downward trend, which has continued through 2015. Set to come off patent in the U.S. in 2016, the company already lost protection in Canada and Brazil and it really needs to plug the hole in the dam. The problem has not been helped by Nexium, which has seen further erosion from generics.

AstraZeneca is relying on a solid pipeline of drugs coming through with 13 API’s in final stage trials as they stand. Its efforts are focused on respiratory, cardiovascular and oncology therapy areas and having presented data at the American Society of Clinical Oncologists (ASCO) recently, the company certainly seems to be planning on making its mark in that area. With MedImmune entering into a licensing agreement with Omnis Pharmaceutical with the aim of marketing oncolytic viruses in immune-oncology, this may well be within its grasp.

While seeking to ensure that the impending patent cliff doesn’t send sales tumbling, AstraZeneca is looking to emerging markets having recently announced a $125 million manufacturing plant in Algeria. AstraZeneca isn’t the first to target North Africa; Sanofi already has two plants established there and the fact that the country offers open healthcare makes it very attractive.

Although the company has had teething problems with approvals in the U.S. and NICE, as well as having the Cancer Drug Fund to deal with, its pushing to gain approval of Brilanta, its CV drug, in the U.S. and this may provide some financial relief in the near future.

—Adele Graham-King

Headcount: 50,000
Pharma Revenues: $25,711 (-6%)
Net Income: $2,571 (-50%)
R&D Budget: $4,821 (-19%)

Top Selling Drugs

The patent cliff had a major impact on UK-based AstraZeneca, which lost over $2 billion in sales for key products, such the acid reflux treatment Nexium, and the asthma therapy Symbicort. The company’s net income dropped from over $5 billion to $2.6 billion, as it dealt with restructuring and other costs.

Then, last quarter, Pfizer launched a bid worth around $120 billion for the company, which was ultimately rejected. Pfizer won’t be able to pursue this acquisition again until late this year, but among the reasons AstraZeneca rejected the offer was the fact that the price was insufficient.

CEO Pascal Soriot has been widely quoted as saying that AstraZeneca can double its annual sales by focusing on core therapeutic groups, particularly oncology therapies, and improving innovation in those areas.

Late last month, FDA reviewers rejected AstraZeneca’s application for olaparib, which would treat a form of ovarian cancer.
Approval of this drug would have been a sign that the changes in AstraZeneca’s approach to R&D are already working.

Just a few days later, Reuters reported that Mr. Soriot increased his own personal share in the company, by spending $3.4 million to add 46,000 shares, bringing his total stake in the company to 197,781, over seven times his base salary.

He projects an optimism about the company that is hard to ignore. As he said in a June interview with Forbes’ Matt Herper, “The whole organization feels that we are back.” He was referring specifically to its oncology R&D, which once led the industry, and is now being invigorated by new approaches. But he might be speaking about the company’s R&D organization.

And AstraZeneca is going well beyond oncology drugs in its future plans. Diabetes is a key focus and the company has strengthened its portfolio earlier this year, buying BMS’s 50% stake in the companies’ joint venture.

Moving to Cambridge
The next few months will tell. However, the company definitely is shoring up its innovative platform. Like many of its competitors, it has moved to the “R&D hub” model, with individual pockets of researchers located near major hospitals and research institutions such as Cambridge’s Biomedical Campus in Cambridge, UK, where the company’s headquarters will be based by 2016.

AstraZeneca has been restructuring its operations, and in March of 2013 embarked on a job cutting program that will eliminate 5,050 jobs between 2013 and 2016. At the same time, management seems committed to making it a great place to work, fostering more communication through efforts such as its online “culture jam,” an online conversation in which the company’s employees share their thoughts on what it is like to develop medications that can save lives. (Editor’s note: Please don’t roll your eyes, dear readers).

Corporate management appears to be committed to making AstraZeneca’s research programs more effective, and is not afraid to make tough decisions such as discontinuing projects that aren’t getting where they need to go. In 2013, in the spirit of “fail but fail fast,” the company discontinued 15 clinical projects, including one for fostamatinib, for which there had been high hopes of success.

AstraZeneca has set a goal of 5-7 projects per year in Phase III by the end of this year, and two NME’s per year by 2020.
Restructuring was costly to pull off, but the program is expected to deliver $300 million per year by the end of 2016, bringing savings to $1.1 billion.

By the end of 2013, the company had 99 projects in its development pipeline, 85 in clinical, 14 approvals, filings or launches, including 11 NMEs in Phase III, double the number in 2012. Three of these Phase III projects were developed in house, and two through acquisitions, namely that of Pearl Therapeutics and Omthera last year.

The company’s sights are focused on emerging markets, diabetes, respiratory and oncology markets, and efforts are evenly divided between small molecules and biopharma efforts (enabled by its previous acquisition of MedImmune).

Last year, the company built two key facilities, one in China and the other in Russia, and hired 7,800 new full time employees for emerging markets and other key platforms. AstraZeneca also plans to build a new $190-million facility in Macclesfield, UK for Zoladex. It says it had 26 inspections from 10 global regulatory agencies last year without any ill effects.

AstraZeneca has also moved to improve transparency, particularly in the area of clinical research.  By the end of last year, half of the company’s 2,241 clinical trials results were reported on, summarized, and posted online, on a dedicated website.

Serious efforts are being made, in any case, by a company and management team that seems committed to improving innovation.

Headcount: 51,700
Pharma Revenues: $27,973 (-17%)

Total Revenues: $27,973 (-17%)

Net Income: $6,405 (-32%)

R&D Budget: $5,243 (-5%)

Top Selling Drugs

Account for 82% of total pharma sales, down from 83% in 2011

AstraZeneca is the last of our top six companies to post a sales drop in 2012, and it was a doozy. A wave of expirations and other price pressures led to a $5.6 billion shortfall, with little to offset it. Only Pfizer posted a larger total sales drop, and only Bristol-Myers Squibb (coming in at #11) fell by such a large percentage. The loss of patent protection for Seroquel IR was the main culprit, lopping $3.0 billion off of 2012’s results, and another $627 million from 1Q13.

Even AZ’s top performer, Crestor, showed weakness, as the statin faced pressure from generic Lipitor. Its 6% drop last year accelerated in 1Q13, with sales falling 12% to $1.3 billion. The drug lost a patent battle in Australia in March 2013, where it brought in approximately $350 million in 2012 sales, but AZ successfully defended Crestor’s patents in the U.S. in December 2012, leading to a settlement with several generic companies and opening the door for an off-brand Crestor several months prior to its July 2016 pediatric exclusivity extension. Nexium will go next, likely cratering its $4.0 billion in revenues.

There’s little growth from AZ’s newer products, certainly not enough to hold back the next wave of patent expirations. This situation cost chief executive officer David Brennan his job in April 2012, and the company now has to hope that the new top dog, Pascal Soriot, can turn things around.

Mr. Soriot previously served as chief operating officer of Roche’s pharma division and chief executive at Genentech, so he has some idea of what a productive pharma company looks like. His first move after joining the company in August was to conserve the company’s cash by suspending $2.2 billion in share repurchases.

In March 2013, Mr. Soriot offered his strategy for AZ’s future. In his words, the company’s strategic priorities are

• Driving our on-market growth platforms to return to growth as we move through a period of patent expiries and revenue declines;
• Progressing the Phase II pipeline, that has the potential to double Phase III asset volume by 2016, and deliver on the promise of our biologics portfolio;
• Launching a steady flow of specialty care products, balancing the company’s historic strength in primary care;
• Rebuilding the R&D engine through innovation and distinctive science supported by co-location of our teams and better access to globally recognized science clusters;
• Dramatically simplifying the business, improving productivity and building a culture that supports long-term success;
• Leveraging business development and acquisitions to deliver upside to the company’s base plan and to strengthen the pipeline further.

As part of that, AZ’s focus will narrow to three areas — Respiratory, Inflammation & Autoimmunity; Cardiovascular & Metabolic Disease; and Oncology — while picking its spots in Infection/Vaccines and Neuroscience.

None of these moves look like they’ll cover the short-term devastation that AZ faces. Even doubling Phase III assets by 2016 doesn’t offer much growth before the end of the decade. As is, if everything breaks right, Mr. Soriot contends the company can exceed revenues of $21.5 billion in 2018. (In a sign that not everything is going to break right, AZ took a $140 million writeoff in June 2013 when it gave up in Phase III on a co-developed compound, Rigel’s fostamatinib, an oral RA treatment.)

So a best-case scenario means that 2018 AZ will be almost 25% smaller than the 2012 version. You can bet that AZ isn’t planning to support the current infrastructure with (at least) 25% lower revenues, so Mr. Soriot has to slash costs while still getting something out of R&D.

Last year’s writeup included a pre-Soriot restructuring announcement intended to “create a simply and more innovative R&D organization with a lower and more flexible cost base.” This year’s overlapping attempt at “dramatically simplifying the business [and] improving productivity” will involve firing 5,050 employees by 2016, at a cost of $2.3 billion and savings of $800 million each year.

As part of the reorg, AZ announced plans to build R&D centers close to bio-clusters, in order to take advantage of talent and partnership opportunities. The company will focus on Cambridge, UK, Gaithersburg, MD and Möldnal, Sweden. For Cambridge, AZ will spend around $500 million on a new site to house its HQ and consolidate its small molecule and biologics R&D.

AZ has also restructured its executive team to reflect its R&D priorities. Research head Martin Mackay was ousted in January 2013, after barely two years on the job, and AZ now has three senior R&D positions covering discovery and early-stage development for small molecules and for biologics, and late-stage development.

Can AZ survive long enough to accomplish its goals? The company still has high hopes for anti-platelet drug Brilinta. Once projected as a Plavix-buster, Brilinta posted revenues of $51 million in 1Q13, with a 29% increase in prescriptions from 4Q12. Early analyst estimates of $1 to $2 billion (or greater!) by 2015 have been revised to $1.3 billion or so by 2018. AZ has a diagnostic that identifies a subset of patients who may stand to benefit from the drug, but will that be enough to get Brilinta to break out against Lilly’s Effient and generic Plavix?

In addition to Brilinta, AZ hopes for growth from its diabetes partnership with Bristol-Myers Squibb. Their co-developed Onglyza treatment brought in $90 million (+27%) for AZ in 1Q13, but reimbursement issues have hampered prescriptions this year. They received EU approval for Forxiga, an SGLT2 inhibitor for type 2 diabetes, in November 2012, but it’s in the early stages of rollout, with negligible sales. The FDA issued a complete response letter for Forxiga’s U.S. application early last year; no word on how that’s advancing.

In August 2012, BMS and AZ closed their deal to co-buy Amylin, giving each a share of Byetta and Bydureon revenues ($69 million in 1Q13). It’s early days for that partnership, but the $3.2 price tag for half of Amylin (along with a $135 million option to “certain additional governance rights over key strategic and financial decisions regarding Amylin’s portfolio”), means AZ needs to see significant results.

It’ll get darker for AstraZeneca in the next few years; we hope the board, the shareholders and every other relevant party has the patience to see Mr. Soriot’s strategy through.

Lowe Down
So here’s another company trying the Totally New Research Site gambit, this one in the original Cambridge (UK, that is). At least the construction crews in the New World’s Cambridge can dig away without fear of disturbing hordes of Roman silver, although the recent identification of Richard III’s gravesite does at least take him out of the equation. I recommend caution. Given the way things have been going for AstraZeneca the last few years, I wouldn’t rule out someone digging through the roof Beelzebub’s living room. Admittedly, Cambridge is not its traditional location, but you never know.

But whatever magic this location (or any location) can work won’t be apparent for another several years. In the meantime, AZ is dealing with an absolutely hair-curling string of costly clinical failures and patent expirations, with little prospect of near-term relief. The company is making a lot of deals, up and down its whole development timeline, in the hopes that these will do what it hasn’t been able to do for itself. There have been layoffs, initiatives, re-organizations, and consolidations, and there will surely be more. By the time the new site gets opened, what sort of AZ is going to be moving into it?

—Derek Lowe

Acquisition News
Target: Pearl Therapeutics
Price: $560 million, plus $590 million in milestones
Announced: June 2013
What they said: “Pearl’s novel formulation technology, together with its development products and specialist expertise, are a great complement to AstraZeneca’s long-established capabilities in respiratory disease, one of our core therapy areas.”

—Pascal Soriot, chief executive officer, AZ

Target: Omthera Therapeutics
Price: $443 million, including Contingent Value Rights
Announced: May 2013
What they said: “[Lead compound] Epanova offers real potential both as a distinctive monotherapy for the treatment of hypertriglyceridemia and in combination with Crestor for patients at high risk of adverse cardiovascular events. This is an exciting acquisition that clearly complements our existing portfolio in cardiovascular and metabolic disease, one of our core therapy areas.”

—Pascal Soriot

Target: AlphaCore
Price: Not disclosed
Announced: April 2013
What they said: “Cardiovascular disease is projected to remain the single leading cause of death worldwide over the next decade and beyond. Through novel approaches like LCAT, we hope to shift the treatment paradigms in this area to help prevent and treat these conditions.”

—Dr. Bahija Jallal, executive vice president, MedImmune unit of AZ

Headcount: 61,000
Pharma Revenues: $32,515 (2%)
Total Revenues: $33,269 (1%)
Net Income: $8,081 (7%)
R&D Budget: $5,318 (21%)

Top-Selling Drugs in 2010

Account for 87% of total pharma sales, up from 86% in 2009.

PROFILE

AstraZeneca remains in an unenviable position: the worst of its patent expirations is still to come, but its pipeline has had numerous disappointments and is full of uncertainty. The company has let investors know that it expects its revenues through 2014 to linger in the $28 to $34 billion range; based on this year’s numbers, that means sales could rise as much as 2%, or drop as much as 16%. As I said, unenviable. (Except for the fact that Crestor posted the biggest year-to-year dollar gain of any drug in our ranks, up $1.2 billion in 2010 sales. That’s enviable.)

In December 2010, AZ made a pair of high-profile pipeline cancellations. First, the company threw in the towel on the BLA for motavizumab, its Synagis followup, after receiving its second Complete Response Letter from the FDA. AZ booked a $445 million charge for the cancellation and cast more doubt over the wisdom of the $15.6 billion purchase (in cash) of MedImmune in 2007. (The canceled BLA was for the prevention of respiratory syncytial virus; the molecule may still be developed for other treatments of RSV.)

A day after the motavizumab cancellation, AZ and Abbott announced they were ending their license agreement to develop Certriad, a combo of Crestor and Trilipix. Certriad received a CRL in March 2010, and the companies “determined that the development of Certriad is no longer commercially attractive.”

Also that month, AZ received a CRL for Brilinta, its oral antiplatelet treatment for acute coronary syndromes. AZ replied to the FDA’s letter in January 2011, and noted that the FDA called for additional analysis of data, but no further clinical trials. A new PDUFA date is set for July 20, 2011. Brilinta was approved in the EU in December 2010 and Canada in June 2011. AZ hopes to pit the drug against Plavix, which posted nearly $10 billion in sales in 2010.

Cresting

Arguably, AZ’s biggest success was its June 2010 victory over a slew of generics makers who were seeking to market Crestor in the U.S. The court decision should bar generic competition until 2016, but AZ still has another opponent in this fight; in May 2012, AZ will take on Watson over a patent claim.

AZ’s going to need every day of Crestor sales it can get. Crestor followed 2009’s revenue jump of 25% with another 26% leap in 2010, vaulting the super-statin into AZ’s bestseller slot, ahead of flat-to-sliding Nexium and Seroquel IR. Other strong performers were the Symbicort combo (+20% in 2010, after a 14% jump in 2009), and Seroquel XR, which was broken out from the IR version this year and posted a 66% jump.

The gap between Crestor and everything else grew in 1Q11, with Crestor posting sales of $1.5 billion (+14%) while Nexium dropped 6% to $1.2 billion and Seroquel IR fell 4% to $1.0 billion. In addition, Arimidex sales dropped 54% in the quarter ($233 million), Seloken/Toprol shaved a third off its sales ($245 million) and Merrem dropped 26% to $172 million, as generics eroded their market share in the U.S. and EU. For the quarter, revenues in the U.S. fell 11% to $3.3 billion, and western Europe dropped 7% to $2.2 billion. Sales in emerging markets rose 13% in that span, but that only added $175 million to the coffers.

As AZ’s management implied in its $28-to-$34 billion revenue guidance, there are plenty of generic losses ahead for the company. Seroquel IR, Nexium, Atacand. The company has some growth prospects in Faslodex (breast cancer) and Iressa (making a comeback in non-small cell lung cancer after being restricted in 2005), as well as an oral diabetes drug, dapagliflozin, which some analysts peg as a $1.5-plus billion drug. That said, it’s

a) co-developed with Bristol-Myers Squibb, and

b) a diabetes drug waiting for FDA approval!

The FDA is so cautious about diabetes drugs in the post-Avandia era that I’d never pin my hopes/sales projections on one. Overall, the company hopes for sales from new and pipeline drugs to reach between $3 and $5 billion by 2014. To me, it seems pretty clear that Brilinta is the key to the company’s future.

The problem is, even if AstraZeneca executes its plans perfectly for the next several years, it’ll end up virtually standing still. So, to reiterate last year’s message: I’d be worried that AZ’s stagnation makes it a takeover target, but I can’t imagine that any pharma would pay much for its assets right now.  —GYR

THE LOWE DOWN

I can’t imagine that it’s been a lot of fun to be at Astra-Zeneca over the last couple of years. And it doesn’t look to be a lot of fun for the next few, either, to be honest. The company is going through a nasty round of patent expirations, and doesn’t have as many good products to replace the departing ones as it should. (A side note: does anyone, ever? Has anyone, ever? Just checking)

Morale has surely been damaged by the constant rounds of cutbacks, closings, and rearrangements. That can’t be helping the effort to find the new profitable drugs, either, can it? And there you have it: the whole Big Pharma package. Whether AZ likes it or not — and whether we like it or not — they are, at the moment, perhaps the most typical big drug company in the world, here in 2011. If you want to see what things are like, go check them out. Just don’t try go and see them Charnwood, or Lund, or big chunks of Wilmington, unless you’re a big fan of empty buildings. Well, to be technical, some of the empty ones in Wilmington are being demolished, but you get the idea. —Derek Lowe

SKIN TO SKIN

AZ has completed a $2.5 billion restructuring that will bring $2.4 billion in annual savings, and the company remains focused on outsourcing all of its API manufacturing, along with other non-core activities. To quote the AZ’s annual report, “We will . . . move further towards a more flexible cost base which will enable us to respond rapidly as our requirements change. To do this, we will continue to make greater use of outsourcing and strategic collaborations with other organizations.”

Perhaps its acknowledged “years in the wilderness” ahead will allow AZ to retool its structure in both manufacturing and R&D. The company didn’t make any significant outsourcing partnership announcements in the past year, but the company did sign an interesting five-year out-licensing deal in March 2011.

Galderma Pharma, a Swiss-based pharma, will have exclusive access to a number of AZ compounds for dermatological indications. According to a Galderma statement, “Initial targets for collaboration have already been identified from disease areas as diverse as oncology, inflammation and central nervous system. These will be interrogated based on translational science and preclinical testing to determine the ones that will progress in the collaboration.”

Clive Morris, head of New Opportunities Innovative Medicines Unit at AstraZeneca, said, “This partnership is an example of how we are leveraging our science in new and creative ways through collaborations with recognized experts outside of AstraZeneca’s core therapy areas.”

Previous Profile: GlaxoSmithKline // Next Profile: Johnson & Johnson

Headcount: 63,000
Pharma Revenues: $31,905 (+4%)
Total Revenues: $32,804 (+4%)
Net Income: $7,544 (+23%)
R&D Budget: $4,409 (-15%)

Account for 86% of total pharma sales, same as in 2008.

PROFILE

Last year, I wrote about how AstraZeneca may find itself as a target for a takeover. Now I can’t envision any of its competitors trying to assimilate it. AZ faces one of the steepest patent cliffs in the industry in the next five years; a Bloomberg report noted that drugs that generated 62% of AZ’s 2008 revenues will face generic competition (not in all markets) by 2014. With around $20 billion in generic exposure, there are likely few suitors looking to buy in just now.

For the most part, AZ has eschewed the “consumer and generics” diversification strategy of its larger competitors, trying instead to research and develop its way out of its pending patent pasting. After several regulatory delays for key products, the company elected to partner with India-based Torrent Pharmaceuticals in March 2010 to sell 18 of Torrent’s branded generic products in nine countries. In AZ’s announcement about the deal, the company noted it “over time plans to broaden its portfolio beyond these 18 products.” We’ll see if that means an expanded alliance with Torrent, or more companies in more regions.

Meanwhile, top-seller Nexium is already sliding as generics whittle away at it in certain markets. The company has tried to develop a number of combo-products with Nexium, with mixed results. The submission for Axanum, a combo of aspirin and Nexium, received a Complete Response Letter from the FDA in June 2010 (as did an sNDA of Nexium to reduce risk of of low-dose aspirin-associated peptic ulcers), but Vimovo, a delayed release combo of Nexium and naproxen, was cleared by the FDA in May 2010 to treat a number of inflammatory conditions along with the risk of developing NSAID-related gastric ulcers.

As with most of its competitors, AZ’s story is one of R&D misses and regulatory delays. Motavizumab, the company’s followup to respiratory drug Synagis, received a Complete Response Letter in December 2009. That’s not just a setback for AZ, which will lose patent protection on Synagis by 2015, it’s also more ammunition for critics of AZ’s $15 billion purchase of MedImmune in 2007.

Certriad, a combo of AZ’s Crestor and Abbott’s TriLipix, also received a Complete Response Letter in March 2010. That one will likely require a lengthy outcomes trial, which could sink its chances of getting to market. Having a Crestor-combo would have helped preserve a portion of the drug’s revenues. Shortly before press time, AZ received a ruling upholding the validity of a key Crestor patent (it’s a surreal court case).

Still, that’s not as bad a turn as the one taken by cancer drug Zactima. The NDA/MAA submissions for Zactima were withdrawn in October 2009, three months after filing, when ongoing Phase III data indicated no survival benefit in NSCLC compared to chemotherapy on its own. (It’s doing better in a trial against thyroid cancer, a much smaller patient base than NSCLC.)

AZ must have its collective fingers crossed that Brilinta doesn’t suffer a similar fate. The company filed an NDA for that antiplatelet treatment in November 2009, with hopes of treating patients with acute coronary syndrome. It’s a huge market, dominated by Plavix. In a massive head-to-head study, Brilinta demonstrated both superior efficacy and a comparable safety profile to Plavix. The safety side is critical; Effient, Lilly’s attempt at biting into the Plavix market, has struggled to build market share, thanks in part to its risk of major bleeding. Some analysts peg Brilinta’s peak sales between $1.5 and $3.0 billion, which could help cushion the fall from that patent cliff in a few years.

But in the short term, AZ’s in for a world of hurt. Good thing they have a new R&D chief! In May 2010, AZ hired Martin Mackay, formerly Pfizer’s small molecule R&D head, for the new role of president of R&D. By “new role,” I mean that AZ kept research and development separate until now. He’s inheriting a system had more misses than hits in recent years, but he’s also at a company where the chief executive officer, David Brennan, has been honest with shareholders and analysts that the next few years are going to be rocky.

Or, as he put it during a Bloomberg interview in February 2010, the company is entering “a period of fluctuating earnings.” In the same interview, Dr. Brennan tried to make the case for sticking with R&D. He remarked:

“The business that we know well and that we’ve been very successful in is the innovation-driven, research-based human health pharmaceutical model. We do not have expertise in other areas. People say, why aren’t you in the generics business? We don’t run a generics business, we run a higher-end manufacturing business. Why aren’t we in the consumer health business? We don’t have any consumer health products.”

It’s rare to hear a CEO speak so plainly about his company’s prospects. There’s no way to put a happy face on AZ’s situation, and maybe it’s a plea to keep his job during the coming years of earnings decline, but it’s a lot better message than, “Nothing to see here! We’re going to cruise past this with ease!”

Now if they could just stop making massive settlements for improper marketing ($520 million for Seroquel) and overcharging Medicare and other payors ($103 million for Zoladex and Pulmicort Respules), maybe I’d feel a little better about their business . . .

Return to Top Pharma Report homepage.

Headcount: 65,000
Pharma Revenues: $30,677 (+7%)
Total Revenues: $31,601 (+7%)
Net Income: $8,681 (+9%)
R&D Budget: $5,179 (flat)

Account for 86% of total pharma sales, down from 83% in 2007.

* Acquired in June 2007 in MedImmune deal

PROFILE

AstraZeneca slipped a spot in this year’s rankings through no fault of its own (see Novartis profile). Not only has the Sandoz unit helped Novartis to leapfrog ahead of AstraZeneca in this year’s rankings, but the generics unit also launched an early copycat of AZ’s top seller Nexium recently in Denmark. Kick ‘em while they’re down, whydon’tcha?

Authorization for generic Nexium has also been granted in a number of smaller EU countries, although it’s protected in most of the major EU markets until March 2010. Sandoz and AZ are also battling over some Nexium patents in the U.S. Nexium’s slow-motion expiration is just the tip of the iceberg; by 2013, AZ’s current top-three products, Nexium, Seroquel and Crestor will all have generic competition.

Symbicort, which in March 2009 received approval for treatment of COPD, has some generic issues in Europe, but a number of separate patents involving composition and delivery mean that it’ll stay exclusive to AZ for a while yet. This is good news, as Symbicort topped $2 billion in sales last year.

AZ saw its Toprol-XL revenues plummet because of early generics in the U.S. The company prevailed in court and now has the market to itself (along with an authorized generic). Sales of the drug in 1Q09 were up 59% to $288 million. AZ also recently triumphed over Apotex to block a generic of its Pulmicort Respules, an asthma treatment. Last November, AZ settled with Teva and authorized a generic of the same drug, which will be on the market in December 2009. Sounds like AZ’s lawyers have been pretty busy.

Down By Law

Unfortunately, they’re going to stay that way. CNS drug Seroquel is performing well and continues to grow, but it may turn out to be another example of the Balzac quote cited at the beginning of The Godfather: “Behind every great fortune, there is a crime.”

In this instance, the charges are that AZ improperly promoted Seroquel for off-label uses and that the company failed to disclose side effects like weight gain and diabetes. At last count, there were 15,000 users involved in around 9,000 lawsuits against AZ. Sound familiar? Yeah, it’s beginning to look a lot like Zyprexa.

The causation hasn’t been clear and AZ has won summary judgments against the first round of complaints, keeping each of those cases from going to trial. However, the release of internal e-mails and other documents about the early promotional efforts for Seroquel has caused the company some embarrassment. The company says it’s spent around $500 million defending itself in these Seroquel cases . . . and none of the cases have been settled out of court!

And, of course, the company is also battling a passel of generic companies over Seroquel’s patents. On the plus side (?), an FDA advisory committee recommended approving Seroquel for schizophrenia in 13-to-17-year-olds and bipolar mania in 10-to-17-year-olds.

Buying or Selling?

Due to its impending patent cliff, there’s been speculation that AZ would join the acquisition party, if only in order to keep up with Pfizer, Merck and Roche. I hesitate to make a call on this, because I got burned on the Schering-Plough — I was convinced no one would buy that company while it was still digesting Organon — but at least I can safely say that the MedImmune acquisition (and AZ’s relative lack of cash after that deal) is going to take AZ out of buying side the large-scale M&A derby.

So how has AZ done with its MedImmune acquisition? It’s been two years, which is an eternity to shareholders, but more of a blip in terms of drug development and new drug approvals. In February 2008, the company filed a BLA for Numax (Motavizumab) to treat respiratory syncytial virus (RSV) in pediatric patients, but the FDA sent a Complete Response Letter in November 2008. AZ contends that it won’t have to conduct further clinical trials, and plans to resubmit Numax this year. And it can’t be bad to own MedImmune at a time when the world is clamoring for flu vaccines.

AZ may not be looking to buy a partner, but that doesn’t mean it’s dancing alone. The company expanded its cholesterol deal with Abbott in August 2008 to give Abbott non-exclusive rights to promote Crestor in the U.S. The deal grew again in June 2009, as the companies agreed to co-promote Trilipix in the U.S. At the same time, Abbott and AZ co-submitted their NDA for Certriad, a combo-pill of Crestor and Trilipix. Last November, AZ revealed data from a new study that showed tremendous CV results for Crestor, helping boost that statin’s growth even as generic statins take hold in the market.

AZ and Merck also recently announced a collaboration that may be more of a novelty than a new direction for drug R&D. Spinning out of a chance meeting of two scientists on an airport security line, AZ and Merck plan to combine efforts to develop a pair of cancer drugs that may have a strong synergistic effect. Keep in mind that the combo in question is in preclinical phase, and that AZ’s solo trial of its drug, AZD6244, failed in a Phase II trial against advanced skin cancer. Still, if the combination shows promise in a Phase I trial, it could lead to more pacts like this, where two development-stage drugs are tested in tandem, as opposed to the usual practice of trying an experimental drug in concert with an approved treatment.

In the “old-fashioned way” of building revenues, AZ has a number of new drugs pending approval. AZ and Bristol-Myers Squibb submitted their NDA for diabetes treatment Onglyza at the end of June 2008, but the FDA has pushed off its review window till the end of July 2009. A potential Onglyza competitor from Takeda has held off submission in Europe and the U.S., pending a new two-year study to generate better data. So if AZ and BMS can get approval for Onglyza, they’ll have some time to make inroads against Merck’s Januvia.

AZ also has high hopes for Brilinta, an anticlotting drug that would compete with Plavix, which has global sales of $9.5 billion. In May, AZ announced that a head-to-head Phase III outcomes trial against Plavix was “statistically significant” in Brilinta’s favor. The trial involved nearly 19,000 patients in 43 countries and will be presented in full at the European Society of Cardiology meeting in August 2009. AZ plans to file Brilinta sometime in 4Q09.

The company is looking at an ugly patent cliff in the next few years, but it has some hopes of getting new significant new revenue streams up and running before then. Now it just has to avoid getting bought by GSK.

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Headcount: 67,000
Pharma Revenues: *$28,713 (+12%)
Total Revenues: *$29,559 9(+12%)
Net Income: $7,983 (-7%)
R&D Budget: $5,162 (+32%)

* Revenues include seven months of MedImmune results

Account for 83% of total pharma sales, down from 84% in 2006.

PROFILE

AstraZeneca has been haunted by recent failures, as several late-stage crashes and commercial mishaps have left it vulnerable. Are things turning around? In the last three months, AZ has negotiated its way out of generic exposure for its top seller (Nexium) and won a court battle extending the patent protection for its #2 seller. Those products added up to more than $9.0 billion in 2007 revenues, so their loss would have spelled doom for the company before its 10th anniversary.

Speaking of anniversaries, June 2008 marked one year since AZ closed on its $15.5 billion acquisition of MedImmune. As I pointed out in GSK’s profile, major pharma companies like to talk about how they’re going to incorporate the entrepreneurialism and flexibility of biopharmas into their existing companies. AZ has been a bit more honest about employing MedImmune for its infrastructure and experience in developing biologics, rather than paying lip service to how they’ll incorporate some sort of freewheeling maverick biotech spirit into a 67,000-employee company.

The acquisition had the immediate effect of bumping AZ’s clinical projects (NMEs and line extensions) from 71 to 95, and doubled the number of projects in Phase III to 10. In February 2008, the company filed a BLA for Numax, a next-generation version of Synagis, a treatment for respiratory syncytial virus (RSV), so the purchase has generated some value.

Still, to my eye, there are moments when MedImmune looks like AZ’s accidental poison pill, keeping unwanted suitors at bay. I’m sure that wasn’t the key driver in acquiring MedImmune; I still take AZ management at face value when they said that MedImmune was intended to deliver a fully-formed biopharma infrastructure, capable of “accelerat[ing] delivery of its biologics strategy while lowering its execution risk,” to quote AZ chief executive officer David Brennan.

That said, I can see how paying off that $15.5 billion bill, on top of the standard problems involved with integrating a major pharma, would make takeover players back off. Especially now that the two top figures at MedImmune have moved on to greener pastures.

Less than two weeks after the acquisition’s anniversary, MedImmune chief executive David Mott and R&D head James Young, Ph.D. chose to leave AZ. The Wall Street Journal’s Health Blog noted that Mr. Mott — who’s sticking around through July — and Dr. Young signed retention term sheets to stay with the company for one year after the merger.

Mr. Mott received a payment of around $145 million from AZ’s buyout, which must have made it awfully difficult to make it through the workday. I’d have set up my computer with a countdown clock to notch off the seconds until the one-year term expired, at which point I would run home and dive into a swimming pool filled with cash, but that’s just me.

Not Dead Yet

I don’t mean to imply that it’s all doom and gloom at AZ. The company’s LDL drug, Crestor, gained almost $800 million in sales in 2007; FDA approval of asthma treatment Symbicort helped that drug reach $1.5 billion in 2007 sales, and Seroquel is picking up new indications as it moves up to become AZ’s top seller.

Crestor “only” increased 16% in 1Q08, but the company noted that it was the only branded statin to gain market share during that period. It’ll likely perform even better in 2Q08, given the fallout from the Vytorin mess (see Merck and Schering-Plough’s profiles for more on that). In November 2007, Crestor was approved by the FDA to treat atherosclerosis, and AZ recently began a trial to test Crestor against Lipitor in that indication.

In addition to that NuMax filing, AZ has two other NDA filings planned: Onglyza (saxagliptin), the diabetes drug it in-licensed from Bristol-Myers Squibb last year, and Zactima, a cancer treatment that received fast-track status from the FDA in 2006 for thyroid cancer.

In-or-Outsourcing?

For our readership, the most interesting event involving AstraZeneca last year was its on-again, off-again statements about its plans to outsource almost all of its manufacturing within the decade.

The kerfluffe began in September 2007. In a London Times article by Robin Pagnamenta, AZ’s executive vice president of operations, David Smith, commented, “Manufacturing for AstraZeneca is not a core activity . . . AstraZeneca is about innovation and brand-building . . . There are lots of people and organisations that can manufacture better than we can.”

He added that the company’s priority was to outsource all API manufacturing, preferably to the far east, and eventually move drug manufacturing out of house, too. He remarked, “We would own the IP, the research, branding and the quality and safety issues . . . but [everything else] would be outsourced. The idea is to take out as many stages as you can.” Mr. Smith’s comments were almost immediately denied by AZ, which presented his remarks as hypotheticals.

When our online editor Joanna Cosgrove asked AZ to clarify things, Joan E. Pitt, AZ’s director of communications, global operations, commented, “We currently outsource API production in Europe and India, and are currently looking at outsourcing intermediates from China. And, under the strategy we will continue to look at opportunities in both Europe and Asia.”

A few months later, however, AZ performed another about face. In AZ’s “authorized generic” agreement with Ranbaxy over Nexium, the two companies made an interesting side agreement. In addition to authorizing Ranbaxy to make a generic of the drug in 2014, with its 180-day exclusivity, AZ will also allow Ranbaxy to manufacture the API for Nexium in 2009 and formulate some of the U.S. supply of it around May 2010.

In a conference call about the Ranbaxy deal, Mr. Brennan said, “This move is absolutely consistent with our supply chain strategy . . . We have been looking to outsource our manufacturing where we can . . . we have long-term plans to exit all API production over the next five to 10 years.”

Ms. Cosgrove called Ms. Pitt again, and she responded, “We have now stated our intent to outsource API manufacture over the next five to ten years . . . Please note this is only API manufacture [for Nexium] and not all manufacture. As noted . . . the full outsource of supply and manufacturing activities is not part of the AZ strategy.”

I’ll be interested to see if the agreement holds up, since there are several generic companies still suing to get the Nexium patents overturned. If it does, this may shed some light on how AZ plans to tackle the outsourcing of its mature products.

I’d love to see a major pharma company blow up the existing infrastructure and radically rethink its very nature. I just don’t get how they plan to source their new compounds (and, yes, I’m assuming they will have new compounds).

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