) recently announced that it plans to initiate strategic reforms
in its research and development (R&D) segment. As per
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.
AstraZeneca plans to close down its current headquarters at
London and relocate the same to Cambridge. The company will
invest $500 million for opening the new facility at Cambridge.
Meanwhile, the company plans to discontinue the R&D
activities at its Alderley Park, Cheshire, UK center. Reduction
in the number of position and relocation will primary affect
employees working at Alderley Park (Cheshire, UK), Wilmington
(Delaware, US) and London offices.
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 the restructuring initiative at AstraZeneca
reflects the company's efforts to cut down on cost while
maintaining its focus on R&D. AstraZeneca through these
initiatives is looking to combat the generic threat looming over
Generic competition has adversely impacted AstraZeneca's revenues
over the past few quarters. This has put significant pressure on
the company. Additionally, there is increasing uncertainty
regarding Crestor due to the entry of generic versions of
) Lipitor in Nov 2011. The company's much hyped antiplatelet
drug, Brilinta's performance has remained lukewarm.
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).
Another pharma stock that looks attractive is
Osiris Therapeutics, Inc.
). Osiris is a Zacks Rank #1 stock.
ASTRAZENECA PLC (AZN): Free Stock Analysis
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