As Crestor generics gear up to battle the brand, AstraZeneca is retrenching with a $1.5 billion restructuring plan.
The London-based drugmaker loses its exclusive on the blockbuster statin drug next week, a long-dreaded event that puts more than one-fifth of its sales at risk. Crestor brought in $5 billion in 2015, making it the company’s biggest seller, and 21% of its full-year sales of $23.6 billion.
So, like other Big Pharmas facing blockbuster patent expiration before it, AstraZeneca raised Crestor’s price in its last months on the market, helping fuel a street-beating $1.16 billion in Q1 sales for the drug. And it’s following up with cost cuts to compensate for the impending loss in revenue.
AstraZeneca will target sales and administrative functions for cuts and continue streamlining its manufacturing network, the company said in a presentation to the media Friday. The aim is to preserve ongoing spending on its pipeline meds and deliver $1.1 billion in annual savings by 2018.
The SG&A cutbacks will push AstraZeneca’s global operations toward sharing back-office services, something that fellow multinational drugmaker Novartis has done with great success. They’ll also hit the sales organization, though few details were available at press time. The restructuring itself will cost $1.5 billion, mostly in cash, AstraZeneca said.
The cost-cutting announcement came as AstraZeneca rolled out first-quarter results, with earnings per share slightly ahead of analyst estimates. Higher-than-expected revenue of $6.1 billion fueled that beat, partly in thanks to an unanticipated milestone payment from Pfizer on Nexium OTC, partly on revved-up sales in diabetes, including Farxiga/Forxiga, which more than doubled to $165 million, and Onglyza, which was up 20% to $211 million. The franchise took a leap in emerging markets as well, with a 65% boost to sales.
Brilinta growth and the Crestor increase also pitched in.
A new indication on Brilinta in the U.S–for longer-term use in ACS patients–helped deliver a 52% hike for the region and new-to-brand prescription share of 12%, the company said.
CEO Pascal Soriot emphasized that Q1 turned out as the company had anticipated, and pointed to the performance in his “growth platforms,” including diabetes and Brilinta. “I was particularly pleased with the results in China, where we continued to deliver double-digit sales growth, and with the progress of our New Oncology launches,” Soriot said, calling out $99 million in sales from the breast cancer med Lynparza, the brand-new lung cancer treatment Tagrisso and Iressa, now approved for first-line use in EGFR-positive lung cancer.
Tagrisso was a particularly good performer with $51 million in sales, Bernstein analyst Tim Anderson pointed out in a Friday investor note.
But certain key products fell short, including Symbicort, which was “especially weak,” Anderson said. Branded Nexium, facing generics and the OTC version, also missed.
Overall, the first-quarter results “remained consistent with the AstraZeneca narrative,” the analyst said.
By Tracy Staton
Source: Fierce Pharma
Giovanni Caforio, the former CEO of Bristol Myers Squibb, is set to become the next board chairman of Novartis, which on Tuesday proposed the pharmaceutical industry veteran as its pick to replace Joerg Reinhardt in the role next year. Reinhardt has served as Novartis’ chair since 2013 and plans to retire when his 12-year term ends in 2025.
GE HealthCare has raised the curtain on two ultrasound systems equipped with artificial intelligence programs designed to assist in diagnosing conditions in women’s health, including obstetric exams. The Voluson Signature 20 and 18 imaging systems include AI tools capable of automatically identifying and annotating measurements of fetal anatomy.
Scientists from the University of Edinburgh’s School of Chemistry have revealed a new sustainable method of manufacturing complex molecules that could reduce waste produced during drug production. The method published in Nature Chemistry could help to prevent severe side effects caused by drugs that can exist as enantiomers.
