AstraZeneca to Shed 2,200 R&D Jobs

AstraZeneca wielded a heavy ax to its workforce today as it prepares for tougher times ahead. The British-Swedish drugmaker is chopping 7,300 jobs, including 2,200 R&D positions, in hopes of achieving $1.6 billion in annual cost savings by 2014.

This is the third round of major cutbacks at AstraZeneca. In 2010, the company announced plans to slash 8,000 jobs over four years, a move that added to the elimination of 15,000 jobs between 2007 and 2009. This specific round girds against an onslaught of generic competition for key products and accounts for several disappointments in the company’s late-stage pipeline. In the coming months, the company will lose patent protection in various markets for the anti-psychotic Seroquel IR, the anti-cholesterol drug Crestor, and the blood thinner Atacand. Meanwhile, AstraZeneca’s late-stage pipeline has faltered. The recent setbacks (adding to earlier ones) include ending development of the PARP inhibitor olaparib, which prompted it to take a $285 million charge; a failed Phase III trial for the antidepressant TC-5214; and a thumbs down from FDA last month for dapagliflozin, a Type II diabetes drug being developed with Bristol-Myers Squibb.

R&D has taken a heavy hit in each round of cuts. During the Q&A session following AstraZeneca’s earnings presentation, one analyst said his back of the envelope calculations suggest the company will have shed 7,600 R&D jobs between 2006 and 2014. Based on comments by AstraZeneca’s R&D chief Martin Mackay, small molecule research has born the brunt of those cuts. He noted that headcount in biologics research has grown, and pointed out that biologics now account for 40% of the company’s early-stage pipeline (candidates in studies earlier than Phase II), up from 15-20% in recent years.

The latest R&D revamp will be primarily focused on AstraZeneca’s neuroscience activities, where the risk of investment is seen as particularly high. “It’s a really tough area,” Mackay said.  “The industry hasn’t produced enough and we haven’t produced enough.”

The challenge was highlighted in November, when TC-5214, an anti-depressant being developed by Targacept and AstraZeneca, failed to show benefit in a Phase III trial. The bad news came as a surprise, as TC-5214 had demonstrated strong efficacy in smaller trials. Three other Phase III trials are underway, but analysts are skeptical that the program can be salvaged. “Prospects appear grim,” Leerink Swann analyst Joshua Schimmer said in a note last month.

AstraZeneca is creating a small team of 40 to 50 scientists that will work with external partners in academia and industry to discover and develop neuroscience drugs. The adoption of this new strategy means that the company’s Montreal R&D facility will be shuttered, and it will end R&D at its Södertälje site in Sweden.

AstraZeneca’s overhaul of its neuroscience activities is the latest in what appears to be a big pharma exodus from internal central nervous system R&D. In December, Novartis said it would close its neuroscience research facility in Basel, Switzerland, and GlaxoSmithKline two years ago decided to end research in certain central nervous system areas, such as depression and pain.

Author: Lisa Jarvis

Share This Post On