AstraZeneca shows signs of life

While generic competition led to lower Q2 revenues, AstraZeneca’s (LSE: AZN, OMX: AZN) interim report wasn’t all bad. As evidence by the recent deal with Bristol Myers Squibb to try to acquire Amylin Pharmaceuticals, the company is seeking innovative ways to mitigate the effect of past R&D failures. With a company and wide network already in place, it can afford to slightly overpay on select assets. Interim CEO Simon Lowth said the company is on track to reach financial targets and build on with investment in long-term potential.

Revenue of 6.66 billion USD is however a whole 18% lower on constant exchange rates than last year, with loss of exclusivity constituting the bulk of that. The remained came from supply chain limitations at a plant in Sweden. Core EPS of 1.53 USD is down only 6% as a gain of 0.19 per share on a cross border transfer pricing issue settlement was recorded. The company maintains core EPS target range for the full-year at $5.85 to $6.15. The Board has recommended an interim dividend of 0.90 USD (58.1 GBp or 6.26 SEK) with Ex-dividend date being August 8th. The share is pointing to a lower open.

AstraZeneca Bristol-Myers Squibb diabetes alliance widens as the latter makes recommended offer for Amylin

Bristol-Myers Squibb Co (NYSE: BMY), has agreed to buy biotechnology company Amylin Pharmaceuticals Inc (NASDAQ: AMLN) 5.3 billion USD in cash on a debt-free basis. The total value of the transaction after taking into account Amylin’s net debt and contractual obligations to Eli Lilly and Company (NYSE: LLY) is about 7 billion. Soon after the announcement, it was said that AstraZeneca (LSE: AZN, OMX: AZN), which had been thought to be in the running to buy Amylin and Bristol-Myers have made a deal to collaborate on Amylin’s products with AstraZeneca paying Amylin, as then a wholly owned Bristol-Myers subsidiary, 3.4 billion in cash for the rights upon the completion of the acquisition. This builds on top of earlier diabetes treatment cooperation of the two big pharma companies.

Bristol-Myers and AstraZeneca will share the profits and losses from the collaboration equally. The Boards of the three companies have approved the deals. AstraZeneca expects immediate positive impact on revenues as it seeks to add into its thin patented drugs and late-stage pipeline. Amylin’s portfolio of GLP-1 drugs including Byetta and Bydureon competes among others with Novo Nordisk (OMX: NOVO B). Added muscle behind the drugs should make the alliance an even more formidable competitor. Amylin’s other assets include a leptin analog Metreleptin currently under FDA review and approved amylin analog SYMLIN® (pramlintide acetate).

Amylin offers reportedly coming in, AstraZeneca still in the mix

The bidding for Amylin Pharmaceuticals (NASDAQ: AMLN) seems to be heating up. The Telegraph reported during the weekend, that AstraZeneca (LSE: AZN, OMX: AZN) had apparently made a takeover bid valuing the company over 4 billion USD, following a rejected offer of 3.5 billion from Bristol Myers Squibb. Bloomberg now writes that several companies are still in the running, with AstraZeneca likely the most desperate of those.

Investors Carl Icahn has been pressing Amylin to complete a deal, something to which it was initially averse to. A second round of bidding is believed to follow soon, with a decision in place perhaps next month. Cowen & Co analyst Phil Nadeau told Bloomberg, that Amylin may generate up to 1.5 billion USD in annual sales from Diabetes treatments Byetta and Bydureon that compate with drugs from Novo Nordisk (OMX: NOVO B)

Despite change at the healm, AstraZeneca dealmaking push still on

According to an article in the Financial Times, AstraZeneca (LSE: AZN, OMXS: AZN, NYSE: AZN) may be doing deals sooner rather than later. The newspaper interviewed R&D Chief Martin Mackay, who said he would be disappointed if the company didn’t strike several new agreements before the end of this year. The departure of long-time CEO David Brennan has not led to a change in R&D strategy, nor does it tie the hands of Mackay.

Just couple months ago Mackay clarified to Reuters the type of deals he is after and he remained consistent in saying that the deals may by full acquisitions of smaller quoted biotechs or licensing deals. There may also be different kind of arrangements, particularly when it comes to funding, such as those involving private equity firms, which could hint a little bit larger deals are a possibility too. Such would likely be in areas like diabetes and inflammation. Other than that, AstraZeneca is looking at a wide spectrum of candidates.

AstraZeneca cuts guidance, Brennan out

The loss of patent protection is starting to show in AstraZeneca’s (LSE: AZN, OMXS: AZN, NYSE: AZN) results. The Anglo-Swedish pharmaceutical company posted a revenue of 7.35 billion $, down 11% for the year, in first quarter of 2012.Majority of the decline can be attributed to loss of revenue from Seroquel IR, Nexium and Arimidex. A negative impact from US healthcare reforms was also felt.

Core operating profit was just under 3 billion and reported number around 2.16 billion. Corresponding EPS numbers were 1.81 and 1.28 Dollars respectively. The company lowers core EPS target for 2012 to $5.85-$6.15 range This caused the stock to sell off and finish the day over 6% lower.

After taking much heat over the pipeline performance in recent years, CEO David Brennan is leaving the company. He has been with the company for a long time, previously as President & CEO of American subsidiary and has been the CEO since January 2006. It seems investors were running out of confidence, although the parties stop short of saying he was ousted. CFO Simon Lowth will act as interim CEO.

Chairman Louis Schweitzer, who was set to retire within months, will step down in advance which will allow the new Chairman, subject to shareholder approval, Leif Johansson to conduct the search for a CEO replacement.

AstraZeneca to acquire Ardea Biosciences

AstraZeneca (LSE: AZN, OMXS: AZN, NYSE: AZN) started delivering on its promise to grow externally through several small acquisitions. The Anglo-Swedish pharmaceutical company said in a release that it has made to a merger deal with Ardea Biosciences, Inc (NASDAQ: RDEA) to acquire the California-based biotechnology company for 32 USD per share, valuing Ardea at 1.26 billion USD including cash (1 billion net).

Ardea’s lead product candidate is a URAT1 inhibitor lesinurad (RDEA594) has recently entered into phase 3 studies in the treatment of gout. In the program the drug is being studies as monotherapy and in combination with existing medications (with Allopurinol and with Lesinurad ) and it aims to keep blood uric acid levels better in check. Over 700 patients have already been treated in Phase I/II studies and the drug has shown promise.

The company also has another drug candidate for gout called RDEA3170 ready for Phase II. In addition to this, it has a MEK inhibitor licensed to Bayer Healthcare currently in Phase 2 study for liver cancer and in phase I /II combination study in patients suffering from advanced pancreatic cancer. The licensing deal has a potential value of just over 400 million USD plus low double-digit worldwide royalties.

Guardian: AstraZeneca may go after Forest Laboratories

British newspaper The Guardian quoted Liberum Capital analysts who believe Forest Laboratories would be a good acquisition target for AstraZeneca in its marketforceslive article. Forest Laboratories, like AstraZeneca, already knows what it feels like to lose the patent protection of a blockbuster. Liberum Capital hiked its recommendation on AstraZeneca and then said that any deal would close after the year passes and one can get a better handle on Forest’s current position.

What speaks against such a move is that it is somewhat out of the price range of the kinds of deals that the company said it is looking to do. Forest Laboratories has a market cap close to 9 billion USD, so it would be almost as expensive to acquire as the disastrous MedImmune deal that still haunts AstraZeneca decision makers.

AstraZeneca received some further bad news today as UK High Court today ruled that SEROQUEL XR® (quetiapine fumarate) prolonged-release tablet formulation patent to be invalid. The patent was challenged by Accord Healthcare Limited, Intas Pharmaceuticals Limited, Hexal AG and Sandoz Limited, Teva UK Limited, and Teva Pharmaceutical Industries Limited. Earlier a District Court in the Netherlands found the patent to be valid. Several other court proceedings are ongoing.

RENAISSANCE Programme ends in failure

AstraZeneca (LSE: AZN, OMXS: AZN, NYSE: AZN) announced this morning that remaining phase 3 efficacy studies with TC-5214 in major depressive disorder also do not meet primary endpoint. The company says it will not pursue regulatory filing. Already in December it was known that the α7 neuronal nicotinic receptor (NRR) modulator failed to meet the primary endpoint change in Montgomery-Asberg Depression Rating Scale.

The studies that the company commented on now were fixed dose studies, so some investors had maintained hopes of a different outcome. RENAISSANCE Programme for TC-5214 is now finished. AstraZeneca is taking an intangible asset impairment charge of 50 million on the remaining value with TC-5214. The news was already discounted in AstraZeneca’s value and the stock climbed ever so slightly for the day. NASDAQ- listed Targacept, Inc on the other hand lost a further 30% of its value today.

AstraZeneca looking to do several smaller deals

AstraZeneca (LSE: AZN, OMXS: AZN, NYSE: AZN) recently lowered its guidance for pipeline contribution into future revenues. Particularly the failure of Targacept in-licensed major depressive disorder drug candidate TC-5214 to reach primary endpoint in two Phase 3 studies was a major blow. The company seems to be ready to try to address its bleak future revenue outlook with external growth.

Reuters interviewed R&D President Martin Mackay who admitted that they are talking to a number of companies for various deals. Last major move was a 15.6 billion USD deal for MedImmune in 2007, which has failed to live up to expectations. This time the company looks poised to do a series of smaller (”low billions”) deals instead. This could include both acquisitions and in-licensing of drugs.

Bernstein analyst Tim Anderson is one of many to throw the name of Amylin Pharmaceuticals (NASDAQ:AMLN) into the mix as a potential target. A standard 30% premium would still leave the price tag below 5 billion. Nordic investors are already keeping Amylin on their radar as its newly approved type 2 diabetes drug Bydureon is set to compete against Novo Nordisk’s (OMX: NOVO B) Victoza. Reuters asked Mackay about Amylin, who merely said that GLP-1 diabetes drugs are an interesting class.

First in a series of large patent expirations that the Anglo-Swedish company is staring at is only weeks away as schizophrenia, bipolar disorder and add-on depression drug Seroquel (quetiapine), which grossed, almost 6 billion USD last year taking into account both once-daily and twice-daily formulation, is set to come off-patent this month in the United States and Europe (U.S. patent expiration date is March 26th 2012). The sustained-release version appears to maintain exclusivity until 2017, leaving the company with some advantages over generic competition.

New Chairman, FDA approval for AstraZeneca

Leif Johansson is being proposed as the next Non-Executive Chairman of the Board in AstraZeneca PLC (LSE: AZN, OMXS: AZN, NYSE: AZN). Johansson is currently the Chairman of Ericsson and from 1997 until 2011, he was Chief Executive of Volvo AB. His pharmaceutical industry experience is from a non-executive director position at Bristol-Myers Squibb from 1998 to September 2011. Swedish stakeholders might feel appeased by the suggestion after the latest personnel cuts have hit home hard. Current Chairman Louis Schweitzer, who is about to turn 70, intends to retire on September 1st 2012.

AstraZeneca also announced that it had received an approval from the FDA for intranasal four-strain influence vaccine FluMist Quadrivalent. This is the first FDA approval for a vaccine containing two type A strains and two type B lineages designed to protect against influenza A and B. AstraZeneca advanced mildly in Thursday trading.

AstraZeneca: FDA orders safety label changes in statins

The U.S. Food and Drug Administration (FDA) requests several cholesterol-lowering drugs called statins to contain warnings that they may raise blood sugar levels or cause short term cognitive side effects such as memory loss of confusion. AstraZeneca’s (LSE: AZN, OMXS: AZN, NYSE: AZN) blockbuster Crestor (rosuvastatin)for the treatment of dyslipidaemia is a member of the statin class of drugs. It is supposed to work by lowering LDL-C (‘bad’ cholesterol) and raises HDL-C (‘good’ cholesterol).

On the other hand FDA is saying there is no longer a need for routine monitoring of liver enzymes as liver damage stemming from the use of these drugs is rare and unpredictable. The agency now asks liver enzyme tests to be done before starting statin therapy.

There has been a hot debate on the merits of the entire class of drugs with some claiming their benefits are small while others naturally disagree. Several of the medicines gross billions and thus are integral for several large pharmaceutical companies.

AstraZeneca to offer cancer drug directly

AstraZeneca (LSE: AZN, OMXS: AZN, NYSE: AZN) tries to scramble for any revenue source as many of its products are losing their patent production. The company is following Pfizer (with Lipitor) in offering branded drugs directly to U.S. customers (who have a valid prescription) with its “Arimidex Direct”- plan. AstraZeneca says it has often been contacted by people wanting to get the branded drug even if doctors have suggested a cheaper copy.

All the recent news about counterfeit medicines has spooked a lot of people. AstraZeneca is pricings its offering below shelf prices but above those of generic copies. Arimidex (Anastrozole) is indicated as an adjuvant (post-surgery) treatment of postmenopausal women with hormone receptor-positive early breast cancer. It came off patent in 2010. In 2009 the drug sold almost 900 million in the US and close to 2 billion worldwide. U.S. revenues plummeted to 42 million in 2011.

Solid current sales, but dim growth prospects for AstraZeneca

AstraZeneca’s (LSE: AZN, OMXS: AZN, NYSE: AZN) numbers were pretty much as expected in Q4 2011. Full-year core EPS was up by more than 8% to $7.28. The company said it lost 3 billion in revenues to generic competition and government savings programs. Most of the recent revenue growth has come from emerging markets. Dividend will be increased to 2.8 USD a share.

Actions stemming from another restructuring initiative will once again lead to large personnel cuts. In total approximately 7300 jobs will be affected. Half of those will be in Selling, General and Administrative category 2200 in R&D and some 1350 within support functions in Operations.

R&D department feels the wrath of recent clinical trial failures and overall weak pipeline. Even AstraZeneca itself has clearly lost trust in the future results as evident by recently changed guidance for pipeline contributions into sales in the coming years. Neuroscience department will be nearly wiped out and remaining operations will be conducted virtually.

In Sweden the research center in Södertälje will be closed and 1000 jobs will be cut. This comes fresh on the heels of the closure of Lund research facility and leaves AstraZeneca with just one R&D facility in Sweden.

Just a little more than a decade ago pharmaceutical industry was big business in Sweden but after the two high profile mergers (Pharmacia and Upjohn and subsequently Pfizer and of course Astra & Zeneca) and ensuing cuts, big pharma research has been nearly eradicated.

AstraZeneca expects to be able to reap $1.6 billion of annual benefits from 2014 onward. The resructuring is estimated to cost a total of $2.1 billion. The company will also shut down R&D facility in Montreal, Canada. The stock responded negatively to the report.

FDA asks for more data on dapagliflozin

AstraZeneca (OMXS: AZN) and Bristol-Myers Squibb have received a complete response letter from US Food and Drug Administration FDA regarding SGLT2 inhibitor dapagliflozin, a drug candidate for type 2 diabetes in adults. The FDA requests additional clinical data to be able to assess the benefit-risk profile of the compound. This may also require additional clinical trials. So far over 8000 adult patients have been on dapagliflozin trials and the companies aim to continue to push ahead.

Last July an FDA advisory panel voted 6-9 against the approval of dapagliflozin after a lively debate on whether more data should be obtained pre- or post approval. In October the PDUFA date was extended by three months as the companies said to provide more data from recently completed and ongoing studies, raising some hopes for a different outcome. AstraZeneca has shed 2% for the day.

AstraZeneca reaffirms outlook after a leak to sell-side analysts

AstraZeneca (OMXS: AZN) reaffirmed short and medium-term forecasts this morning after an inadvertant leak of an out-of-date spreadsheet templeta to sell-side analyst community in connection with a routine consensus estimate collection process had raised some questions. AstraZeneca maintains 2011 expextations communicated on December 20th.

The company also reaffirms assumptions for revenue, margins and cash deployment for 2010-2014 last updated a year ago in connection with the Q4 2010 interim report. These include a revenue target of $28bn to $34bn per annum, lowered current pipeline contribution into revenue forecasted to be in place by 2014, double-digit growth in emerging markets, a gross margin target above 80%, progressive dividend and periodic share repurchases and 40-50% of after-tax cash flow reinvested into R&D.

AstraZeneca’s pipeline starting to look awfully thin

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.

Nordic Stocks news in brief from 05.12.2011

Financial Times says that S&P is about to have all AAA-rated Euro countries on negative creditwatch. Finland is among those precious few countries still enjoying low borrowing costs in the eurozone.

According to an article in the Wall Street Journal, Hennes & Mauritz is planning to forge ahead aggressively in China. H&M plans to move onto second tier and even smaller cities as the purchasing power of the rising middle cls in China increases. The article also talks about important nuances concerning H%M’s dealings in China.

Orkla ASA (OSE: ORK) notified in the after the trading session that it has sold its entire holding of 23 million shares in reverse vending machines firm Tomra Systems (OSE: TOM), representing 15.5% of the total share capital of Tomra, to Latour Investment AB (STO: LATO B). The price per share was 38.5 NOK. Tomra Systems closed at 40 NOK per share on Monday.

Financially troubled home decoration retailer Tiimari (HEL: TII1V)warned its Gallerix businesses’ revenue in Sweden was lower than forecasted in November and subsequently lowered Tiimari segments full-year EBITDA guidance from lower than last year to significantly lower than last year (and still obviously negative). Gallerix business unit has been the lone unit of the group posting positive results since Tiimari acquired it in 2007. Now it may post a loss for the year.

Swedish internet publication DagensHandel.se interviewed Gallerix’s CEO on Monday and he said that Tiimari has been gauging interest for the sale of the company. The CEO Dan Crewe said that synerge benefits in between the companies have proven smaller than expected. Selling right after the company posts a loss on the cheap would certainly be a logical continuation in Tiimari’s continued destruction of shareholder value.

Pandora (CPH: PNDORA) and D/S Norden (CPH:DNORD) will be replaced by AP Moller-Maersk A/S A-shares (CPH:MAERSK A) and Nordea ((OMX: NDA SEK) (OMXH: NDA1V) (OMX: NDA DKK)) in OMX Copenhagen 20 index (20 most traded companies in Copenhagen exchange) as a part of the semi-annual review on 19th of December. After that the index will be consisted of the following stocks: Carlsberg B, Chr. Hansen, Coloplast B, Danske Bank, DSV, FLSmidth, GN Store Nord, Lundbeck, Mærsk A, Mærsk B, NKT, Nordea, Novo Nordisk, Novozymes, Sydbank, TDC, Topdanmark, Tryg, Vestas and William Demant.

AstraZeneca (LSE: AZN, OMXS: AZN, NYSE: AZN) and UK’s Medical Research Council (MRC) have struck an agreement granting UK academics access to 22 compounds developed by AstraZeneca.

AstraZeneca Q2 numbers

AstraZeneca (LSE: AZN, OMXS: AZN, NYSE: AZN) raises Core EPS guidance to 7.05 to 7.35 USD range on re-phasing, expected increase in net share repurchases and a beneficial impact from exchange rate movements realised in the first half. AstraZeneca’s board has proposed a first interim dividend of 0.85 USD and, when completed, Astra Tech sale proceeds will go to share repurchases. It consequently also upped shareholder cash return targets for the full year. The company has a dividend policy intending to grow dividend each year.

Second quarter revenue was 8.43 billion USD reflecting 0.5 billion of revenue lost to generic competition and government price interventions. Core operating profit was down 10% to 3.322 billion. R&D expenses were up on several product candidates entering late stage trials. AstraZeneca has opened flat where as the wider market is down sharply to start the day. More information on the company's Q2 page.

Subpoena involving AstraZeneca in the US

NYSE listed pharmacy chain Medco Health Solutions, Inc wrote in its Quarterly report SEC filing that it has received a subpoena earlier this month from the United States Department of Justice concerning its arrangements with AstraZeneca (LSE: AZN, OMXS: AZN, NYSE: AZN) over four of AstraZeneca’s drugs. According to reports the drugs in question are Nexium, Prilosec, Plendil and Toprol XL-Astra. Potential liabilities from drug-maker-pharmacy arrangements can be large. AstraZeneca is due to report quarterly earnings tomorrow morning.

FDA approves AstraZeneca's Brilinta

AstraZeneca (LSE: AZN, OMXS: AZN, NYSE: AZN) has more than made up for yesterday’s decline when it announced after market close yesterday that FDA has approved blood thinner Brilinta (ticagrelor) to reduce the risk of heart attack and cardiovascular death in adult patients with acute coronary syndrome. The drug’s label will include a black-box warning about risk of significant, sometimes potentially fatal, bleeding and reduced efficacy if taken with more than 100 milligrams of aspirin a day.

FDA asked for more information in comparison to Plavix last December delaying approval. Brilinta was approved in Europe in the same month under the name Brilique. The drug is a potential blockbuster and removes some of the uncertainty as AstraZeneca has some big selling drugs coming out of patent protection in relatively near future.