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It has been a non-stop news week for pharmaceutical giant AstraZeneca. Its share price has jumped 186.0 in the last seven days from 3,050 to 3,236. The stock hit a high of 3,273 at 9:40 this morning before receding to 3,250 by 12:30 pm.
Massive Cutbacks
On 18 March the company announced that it would be eliminating 1,600 jobs over three years whilst closing its research and development center in Alderly Park.
On 21 March AZN announced the elimination of 2,300 sales positions around the globe, “the majority [of which] is related to programs under or already communicated to affected employees.”
Annual Report
The “most significant features” of the company’s 2012 financial results were, shall we say, not inspirational. Revenue dropped by 15% to $28 billion. Operating profits fell 34% to $8.1 billion. Earnings per share shrunk 9% to $6.41. AZN noted investor concerns about impending loss of patent protection on key products like the anti-psychotic Seroquel and the atorvastatin Crestor and an apparent lack of new products in the pipeline to take their place when the protection is gone in 2016.
While AZN’s CFO went to great length to explain outside forces on items like Crestor, including regulator and competitive problems, in the U.S. at least, Crestor sales have been decreasing due to it’s high price. Some health-care plans will not pay for it, and many consumers cannot afford it.
Crestor Lawsuits
AstraZenica announced this morning that it had settled a major patent-infringement lawsuit with Watson Laboratories in U.S. Federal Court of Appeals. This is only one of many similar suits currently in litigation over Crestor. AZN is trying to curb that infusion of similar generic versions of Crestor that have been released while Crestor is still under protection. The basis for competitors’ product introductions is in the interpretation of activities surrounding the original issuance of the patents. Under the terms of the settlement AstraZeneca will allow Watson a three-month head start to market their product before the expiration of the Crestor patent. However, Watson will be obligated to pay 39% of the revenue they receive for their product during that period to AstraZenica. This precedent should bode well for the other suits that AZN has filed.
New Executive VP
This morning AZN announced the appointment of Marc Dunoyer to the position of Executive Vice-President of Global Portfolio and Product Strategy. In the new position for both Dunoyer and the company, he will oversee business development, including mergers and acquisitions. Denoyer had previously been a member of the GlazoSmithKline executive management team.
New Alliances
In yet another announcement demonstrating the company’s sprint to restructure to retain its leadership position, AZN reported this morning that it has form strategic alliances with the Swedish Karolinska Institutet and Moderna Therpeutics. These alliances will leverage the expertise of AstraZenica’s new partners whilst giving them the benefit of AZN’s global distribution footprint.
AstraZenica Executive Vice-President, Menelas Pangalos said that the new alliances “will speed our ability to translate groundbreaking research into the delivery of new medicines.”
AZN knows what it needs to do to get where its going, and its not wasting any time in getting underway.
