By Alex MacDonald
LONDON-- AstraZeneca PLC is betting on new cancer drugs to help
drive long-term revenue growth as the British group stakes out an
independent future after the rejection of Pfizer Inc.'s $120
billion takeover offer in May.
The U.K. pharmaceutical company said on Tuesday that it has made
good progress with its late-stage pipeline of new drugs as it
reaffirmed its plan to grow revenues by three-quarters to more than
$45 billion by 2023.
AstraZeneca expects to bring six cancer drugs to market by 2020
and believes cancer drugs could account for about a quarter of its
revenues by 2023.
The overall revenue target was previously unveiled at the height
of its defense against Pfizer earlier this year but this is the
first time AstraZeneca has highlighted cancer treatments as a key
growth pillar in its plans.
The global pharmaceutical industry has since seen a succession
of big merger attempts, not all of them successful, including
Actavis PLC's agreed $66 billion offer for Botox maker Allergan
Inc., announced Monday.
AstraZeneca said it is moving ahead of schedule with 14
potential new medicines in registration compared with an original
target of eight. It also said it has the potential to win eight to
10 approvals in 2015-2016. In oncology, the field of treating
cancer, it has 13 combination trials under way and 16 planned.
"Net, net we are...confident we can deliver the $45 billion, we
are more confident than before," said Chief Executive Pascal Soriot
despite acknowledging that the pharmaceutical industry is a risky
business.
"We have more than doubled the number of potential medicines in
our late-stage pipeline since 2012 and we are on track to return to
growth by 2017," he added.
AstraZeneca executives are set to give further details about its
business strategy as a six-hour investor presentation continues
Tuesday. The investor day is taking place just eight days before
Pfizer's six-month bidding moratorium on AstraZeneca comes to an
end.
Mr. Soriot declined to speculate on whether Pfizer would make
another offer but noted that U.S.-based AbbVie Inc. pulled its $54
billion bid for Dublin-based pharmaceutical firm Shire PLC in
October after the U.S. government announced plans to close an
important tax loophole. That loophole had spurred many U.S.-based
pharmaceutical firms, including Pfizer, to launch takeover bids for
pharmaceutical companies abroad to lower their tax rates.
"The tax inversion risk...proved to not only be a risk but a
reality. And we believe that it would have really created
substantial disruption [for our business] to go through an
agreement that would have potentially ended," Mr. Soriot said.
AstraZeneca expects a strong pipeline of new drugs to help
offset the negative impact of expiring patents over coming
years.
It will also seek partnerships and bolt-on acquisitions to
support its business, Mr. Soriot said.
Near-term growth will come from five growth platforms that
account for more than half of the company's revenue, comprising
cardiovascular, diabetes, and respiratory drugs as well as drugs
for the emerging markets and Japan.
Cancer drugs will become the sixth growth platform over the
medium term.
AstraZeneca will continue to invest in research and development
in three core therapeutic areas: respiratory, inflammation and
autoimmunity; cardiovascular and metabolic disease; and oncology.
These three areas currently account 69% of the company's
revenue.
It will also invest in biopharmaceutical drugs, which tend to be
harder to replicate given their biological origins. These drugs
account for nearly half of its pipeline and are forecast to pave
the way for a more sustainable and profitable business, the company
said.
Write to Alex MacDonald at alex.macdonald@wsj.com
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