First wave of AstraZeneca’s CNS R&D group gets the ax

Posted under AstraZeneca, Blog, Companies, David Brennan, Diagnostics, Europe, Funding, layoffs, Medical Devices, Medical Supply, Pharmaceuticals, R&D, Startups, Universities, Videos by john

AstraZeneca isn't wasting any time in pushing ahead with draconian cuts to its neuroscience work in its big R&D hub south of Stockholm. The first 50 scientists have already been shown the door, according to local news reports, part of the first wave of 400 job cuts as AstraZeneca ($AZN) slashes a total of 1,100 positions at the research complex.

"The first 50 left two weeks ago. Some will leave during the summer and others early this autumn and the whole move should be completed in December," AstraZeneca spokesperson Ann-Leena Mikiver told news agency TT. AstraZeneca has been inviting in companies to interview some of the exiting staffers, reports The Local, an English language news service. And the pharma giant is also offering advice to would-be entrepreneurs during "start-up days."

Following a number of rival pharma companies like GlaxoSmithKline ($GSK), AstraZeneca has been radically downsizing its exposure in the neurosciences, a field that has delivered far more disappointments than new products in recent years. In place of its big facility AstraZeneca will go "virtual" with 40 to 50 scientists working out of Boston and Cambridge, U.K., collaborating with academics and other biotechs around the world.

AstraZeneca had already cut more than 20,000 workers in the last 5 years before announcing plans to shed another 7,300 staffers worldwide. Generic competition has begun to bite deep into profits and AstraZeneca has been given harsh reviews for its late-stage pipeline, a situation that helped inspire the recent departure of CEO David Brennan.

- here's the story from The Local

Special Report: AstraZeneca - Top 10 pharma layoffs of 2011

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Merck KGaA chief swears off major deals amid pipeline woes

Posted under Blog, cladribine, Companies, Diagnostics, Funding, Karl Ludwig Kley, layoffs, M&A, Medical Devices, Medical Supply, Merck KgAA, Pharmaceuticals, Pipeline, Startups, Universities, Videos by rmcbride

Germany-based Merck KGaA won't be restocking its ailing R&D pond via megadeals this year, despite major setbacks in the pharma and chemical company's drug pipeline. Company CEO Karl-Ludwig Kley informed investors today that his company would be focusing on its previously revealed cutbacks while avoiding large M&A deals through 2013, Reuters reported.

German Merck has struggled on the pharma front in recent years. Notably, the FDA shot down Merck Serono's MS pill cladribine last year, damaging the company's future plans to grow its multiple sclerosis drug business. And the cladribine fiasco is only a symptom of a much wider ailment in a Serono pipeline that has failed to inspire. Now the company believes that it has to tighten its belt and reduce its workforce.

Kley hasn't specified how many workers will get the ax. According to Reuters, the company plans to slash costs through 2018, with job cuts as one area of emphasis for reducing expenses. The firm wave of restructuring is expected to last through 2013, during which time Kley plans to shun big and expensive takeovers, Dow Jones Newswires reported. Yet the silver lining for biotechs could be that smaller deals and licensing agreements remain on the table.

"We do not plan to make any major acquisitions during this first phase of the program. However, we will continue to strengthen our business through in-licensing or targeted acquisitions if the opportunities arise," CEO Karl-Ludwig Kley said, as quoted by Reuters based on his prepared remarks for Merck's annual shareholder meeting.

- check out Reuters' story
- see the Dow Jones report
- and the RTTNews coverage

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Lilly CEO avoids Pfizer-like cuts, focuses on pipeline

Posted under Blog, Companies, Diagnostics, Eli Lilly, Funding, Generic, John Lechleiter, layoffs, Medical Devices, Medical Supply, Pfizer, Pharmaceuticals, Pipeline, R&D spending, solanezumab, Startups, Universities, Videos by rmcbride

Drugmakers have axed thousands of R&D workers and tightened their belts to weather the patent cliff and other troubles facing their industry, but Eli Lilly ($LLY) CEO John Lechleiter has held firm to his position that cutting expenses alone isn't a solution to the challenges at his company. And he thinks that the way forward for the Indianapolis-based pharma group resides in its pipeline.

Singing a familiar tune in an interview with Bloomberg, Lechleiter said: "I don't think we can save our way out of the enormous challenge we face. The best course is to maintain our focus on advancing our pipeline." He also makes a case for R&D investment in a Forbes commentary posted yesterday afternoon.

Ticktock. The clock is ticking for Lilly, as time is winding down to perhaps the biggest moment of the year for the drugmaker in the second half of 2012 when data from a pivotal study of its Alzheimer's disease drug solanezumab are revealed. Many analysts and industry watchers are giving the program slim chances of success, but a victory would certainly go a long way to replacing revenue from Lilly's drugs that face competition from generic meds.

Sanford C. Bernstein analyst Tim Anderson calls the experimental Alzheimer's drug Lilly's "lottery ticket" that could bring the company $9 billion in revenue if approved, Bloomberg reported. The chilling aspect of that analogy, of course, is that lottery tickets aren't often winners.

In the meantime, Wall Street has been cheering Pfizer ($PFE) CEO Ian Read as he slashes expenses from the drug giant's budget, which he vows will fall by another $1 billion this year.    

- here's the Bloomberg article
- check out Lechleiter's Forbes commentary

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Nektar boosts R&D presence in San Francisco

Posted under Blog, Companies, Diagnostics, Funding, layoffs, Medical Devices, Medical Supply, Nektar Therapeutics, Pharmaceuticals, San Francisco, Startups, Universities, Videos by Ryan McBride

Nektar Therapeutics ($NKTR) has announced a move to consolidate all of its U.S. research and development at its Mission Bay location in San Francisco. The company, a maker and developer of PEGylated drugs, plans to relocate 30 R&D workers from its research site in Huntsville, AL, to Mission Bay by July as part of the move. The company plans to keep manufacturing operations in Alabama, however. The San Francisco Business Times reports that the company, which will also keep its research outpost in India, plans to cut 5 jobs in Alabama. Article