AstraZeneca in experimental drugs push

AstraZeneca plans to seal several new deals this year to fill its flagging pipeline of experimental medicines, which may be funded jointly with private investors.

Martin Mackay, president of research and development at the Anglo-Swedish pharmaceutical group, told the Financial Times he would be “personally disappointed” if he had not concluded new agreements before the end of 2012.

He said that could include partnerships with other large drug companies, full acquisition of smaller quoted biotech companies and licensing deals for specific drugs developed by others.

The comments came as he launched a vigorous defence of the company’s existing R&D strategy despite growing investor concerns about future prospects which helped trigger the abrupt retirement of David Brennan as chief executive, announced last month.

AstraZeneca has suffered a series of setbacks with late-stage medicines in recent months, at the same time that it is bracing for a sharp drop in earnings and sales on existing products as their patents expire.

But Mr Mackay said he and his team had remained “undistracted by recent events”, referring to Mr Brennan’s departure. “I know we are doing the right things.”

He said the company would look at “alternative forms of funding” such as joint investment on drug programmes with private equity firms. “The notion of working with people to share some risk and fund some programmes is natural for us,” he added, stressing they would likely be in core therapy areas such as diabetes and inflammation.

Eli Lilly is already jointly funding drug development with Quintiles, and Jon Symonds, AstraZeneca’s former chief financial officer who now holds the same position at Novartis, floated the idea after he left to join Goldman Sachs.

Mr Mackay said AstraZeneca was “very open” to spinning out assets, as he stressed its efforts to increase flexibility and reduce the proportion of spending by the company on fixed costs on in-house researchers.

He said he was spending an increased amount of time in discussions on science with non-executive directors and with investors because “they want to hear from R&D”.

Since his appointment in 2010 Mr Mackay has shaken up the leadership of research and development by hiring 31 of the top 50 executives from outside the company; and culled 40 per cent of the portfolio of experimental drugs to axe those that were moving “too slowly or were the wrong target”.

He said he had reformed the operating model to shift from a system focused on the quantity to the quality of drugs moved from the laboratory into testing in humans; and a new emphasis on personalised medicines, improved clinical trial design and cost effective treatments.

He said he should be judged on the company’s ability in the coming months to launch new medicines successfully, complete deals, accelerate the number of drugs tested in humans and “wring” more sales from existing products in emerging markets and following patent expiries.

He questioned the use by some rivals including GlaxoSmithKline of “return on investment” calculations for R&D, saying “you can always do things with figures” and stressing instead his priority was that “you’ve got to get molecules across the goal line”.