) recently discussed its strategy for future growth at its
investor day. The company stated that it plans to focus on three
core therapy areas: respiratory, inflammation & autoimmunity,
cardiovascular & metabolic disease and oncology.
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It also plans to accelerate several candidates (including
olaparib, tralokinumab, sifalimumab/MEDI-546 and selumetinib)
into late stage development. AstraZeneca aims to submit one
Biologic License Application (BLA) every year from 2016.
AstraZeneca is looking to boost its pipeline through early stage
research deals, forming global partnerships with one or two of
its peers besides existing collaborations with
) and in-licensing and bolt-on acquisition.
The company also plans to increase its investment to support key
marketed products such as Brilinta. Selling, general and
administrative expenses will also be optimized with the help of
restructuring activities, which will result in termination of
approximately 2,300 employees.
We note that last week, the company announced its plans to
initiate strategic reforms in its research and development
(R&D) segment. As per the proposed plans, the company's
R&D activities will be primarily centered in three facilities
including UK (Cambridge), US (Gaithersburg) and Sweden (Mölndal).
AstraZeneca expects to execute these plans by 2016.
The proposed initiative will result in relocation and termination
of approximately 2,500 and 1,600 roles, respectively, in the
2013-2016 timeframe and cost approximately $1.4 billion.
We believe that ongoing collaborations and restructuring
initiatives emphasize AstraZeneca's efforts to cut down on cost
while maintaining its focus on R&D. AstraZeneca, through
these initiatives, is looking to combat the generic competition
faced by the company. Generic competition has adversely impacted
AstraZeneca's revenues over the past few quarters. Moreover,
products such as Nexium and Crestor are slated to go off patent
in the next few years.
AstraZeneca carries a Zacks Rank #3 (Hold). However, other large
cap pharma stocks such as
) currently look more attractive with a Zacks Rank #2 (Buy).