Thursday, February 26, 2015
AstraZeneca - I suppose it could be worse
I have just heard from a reliable source that AstraZeneca is spinning out its EARLY antibiotic research effort. It looks like “early” is defined as up to and including phase II. One product in that pipeline is AZD0914 for the treatment of highly resistant gonorrhea. The spin out will be a wholly owned subsidiary of AZ and will be funded with $40 million from AZ. Although SOME of AZ’s current employees will go to the newco, 95 from Waltham, Mass apparently will not and will join the growing number of folks in the unemployed antibiotic research roles or will be retained in other areas of AZ.
This news is confirmed by an article from John Carroll at Fierce Biotech.
This shows that AZ was unable to attract any partners under the terms it insisted on – a major stake – on the order of 50% - in a spin-off and a valuation that was probably unrealistic for most investors and for other pharma companies. If you build it on a shaky foundation – no one will come.
AZ has been consistent for almost two years – antibiotics do not provide a return on investment. In my view, they are consistently wrong and will be shown to be so in the next five years.
There are two pieces of not so bad news here –
The LATE pipeline – phase III and later products, will continue to be supported within AZ. This will include certain antibodies being pursued by AZ’s Medimmune, ceftazidime-avibactam, aztreonam-avibactam, and the marketed products ceftaroline and meropenem. Note that ceftaroline-avibactam is not mentioned.
Actavis/AZ’s ceftazidime-avibactam was just approved by the FDA based on phase II data and following the advice from their advisory board last December.