) agreed to sell its Alderley Park, Cheshire, UK center to
Manchester Science Parks - a public-private partnership - as the
company aims to shift its research and development (R&D)
activities to a new site in Cambridge. The transaction, whose
details were not revealed, will close shortly.
AstraZeneca said that it will remain a key tenant on the site
whose handover to the new owners will occur over a three year
period in a phased manner. Even after the completion of the sale,
700 AstraZeneca employees will continue performing non-R&D
roles at the site.
We note that the company had announced its intention to
discontinue R&D activities at its Alderley Park site in March
last year as part of its plans to revamp its R&D
structure. The company had also announced at that time that
it will close its current headquarters in London and relocate the
same to Cambridge in 2016. The agreement to sell the 400 acre
Alderley Park site is a move in that direction. Due to the
impending sale, AstraZeneca will incur $275 million charges in
the first quarter of 2014.
In Mar 2013, AstraZeneca had also announced that its R&D
activities will be centered in three facilities including UK
(Cambridge), U.S. (Gaithersburg) and Sweden (Mölndal) by 2016.
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
it. Generic competition has adversely impacted AstraZeneca's
revenues over the past few quarters. This has put significant
pressure on the company.
AstraZeneca, one of the largest biopharmaceutical companies in
the world carries a Zacks Rank #4 (Sell). Better-ranked stocks in
the biopharma space include
Alexion Pharmaceuticals, Inc.
Gilead Sciences, Inc.
). All 3 stocks carry a Zacks Rank #1 (Strong Buy).
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