AstraZeneca PLC Investors Nervous as Its Recovery Hinges on the Success of New Meds and Key Drug Data

February 2, 2017
By Alex Keown, BioSpace.com Breaking News Staff

LONDON – Shares of AstraZeneca have dropped slightly this morning after the company said profit and revenue streams will likely fall in 2017 as generic drugs eat into the marketshare of its blockbuster anti-cholesterol drug Crestor.

The British pharmaceutical company said it expects a “low to mid single-digit percentage decline in revenue,” Reuters reported this morning. Part of the company’s woes are linked to a loss of exclusivity on its top-selling drugs.

However, the company believes there is light at the end of the tunnel in the form of new drugs being developed, including a combination lung cancer drug that some investors have called risky, Reuters said.

The primary endpoints of AstraZeneca’s Phase III MYSTIC trial for its first-line lung cancer treatment was restructured in January. The trial was initially designed to assess the benefit of durvalumab monotherapy and durvalumab and tremelimumab (durva + treme) combination therapy versus standard-of-care (SoC) chemotherapy, focused on progression-free survival (PFS). However, now the trial will assess PFS and overall survival endpoints in patients with PDL1-expressing tumours for both durvalumab monotherapy and the combination of durva + treme, as well as in ‘all comers’ for the combination of durva + treme, versus SoC chemotherapy, the company said.

Mick Cooper, an analyst with Trinity Delta, told Reuters that the MYSTIC trial is crucial for AstraZeneca. Pascal Soirot, chief executive officer of AstraZeneca, told reporters on a conference call that the Mystic trial “was ‘not binary,’ since it could show durvalumab works on its own in a minority of people, even if the combination doesn't work for all patients as hoped,” Reuters said.

As the company faces declining revenues, it has undertaken several steps to reorganize, including a restructuring plan and divesting itself of non-core assets. In 2016, Soirot announced the company was undergoing a restructuring plan to net savings of about $1.1 billion by the end of 2017. The restructuring plan will involve a $1.5 billion one-off restructuring charge, with total restructuring charges expected to be $2.4 billion through the end of 2017. In December, AstraZeneca announced layoffs of 700 employees in the company’s U.S. commercial business unit include sales and non-sales positions. AstraZeneca said in a statement that the cuts are part of a strategic transformation of its commercial business that will be “part of the company's return to growth strategy.”

In addition to layoffs, AstraZeneca has divested itself of properties that are not considered part of the company’s strategic investments. In October, the company struck a $330 million deal with Cilag GmbH International, an affiliate of Johnson & Johnson , for rights to Rhinocort Aqua outside the United States. The company also struck a $150 million deal with Insmed Incorporated for AZD7986, a novel oral inhibitor of dipeptidyl peptidase I. Also AstraZeneca sold the U.S. rights to Toprol-XL and its authorized generic to Canadian-based Aralez Pharmaceuticals for $175 million. Toprol-XL, a cardioselective beta-blocker, is used for the treatment of hypertension alone or in combination with other antihypertensives.

AstraZeneca has seen some good news with older drugs. On Jan. 30, the U.S. Food and Drug Administration approved the asthma drug Symbicort for pediatric patients ages six to 12. The inhaler is also approved for use in adults.