In a major setback for the Anglo-Swedish big pharma company, AstraZeneca (OMXS: AZN) today announced bad news on two of its late-stage drugs. The company said that investigational PARP inhibitor olaparib will not proceed into Phase III development in ovarian cancer. AstraZeneca felt that further analysis of an earlier Phase II study establshed that the progression free survival benefit shown is unlikely to translate into overall survival benefit, which is the definitive measure of clinical benefit in the indication. A 285 million USD pre-tax charge is taken as a result of this decision.
AstraZeneca also announced that TC-5214, an α7 neuronal nicotinic receptor (NRR) modulator developed in cooperation with American biopharmaceutical company Targacept, did not meet its primary endpoint in a Phase III efficacy and tolerability study as an adjunct treatment for patients suffering from major depressive disorder. This is the second of a total of four Phase III studies in what the companies call RENAISSANCE Program and both of the studies which have read so far failed to reach the primary endpoint of change on the Montgomery-Asberg Depression Rating Scale (MADRS).
The two aforementioned studies (RENAISSANCE 2 and 3) were flexible dose studies and the two remaining studies are fixed dose studies expected to complete in early 2012. There is also a long-term safety study in progress. AstraZeneca will review regulatory filing targets after the remaining studies report, but takes $96.5 million pre-tax impairment charge based on lower probability of success.
AstraZeneca affirms full year financial target but guides towards the lower bound of the prognosed full-year core EPS (7.20-7.40 $) as a result of the charges taken. The charges will have $0.21 negative impact on 2011 earnings. AstraZeneca is under pressure to offset looming patent losses from its blockbuster drugs and its pipeline is relatively thin compared to other big pharma companies. The stock, which is already trading at a discount to peers, is down 1.5% while the rest of the Stockholm exchange is a solid 4% in the black.
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