Biotech Values

[DewDiligence]

AZN to Cut 3,000 Jobs

[What Pfizer doeth, other Big Pharma shall follow. For handicapping of AGIX-1067, see iwfal’s in-depth analysis in #msg-15984485.]

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070201:MTFH46879_2...

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Thu Feb 1, 2007 6:21 AM ET

LONDON, Feb 1 (Reuters) - Anglo-Swedish drugmaker AstraZeneca Plc <AZN> met forecasts with a 28 percent jump in 2006 profit on Thursday but predicted slower growth this year as its key drugs mature, and announced plans to cut 3,000 jobs.

Full-year pretax profit was $8.54 billion on sales up 11 percent to $26.48 billion, driven by demand for blockbusters like anti-ulcerant Nexium, cholesterol fighter Crestor and Seroquel for schizophrenia.

Earnings per share surged 33 percent to $3.86, matching the average forecast of a Reuters poll of 19 analysts. For 2007, the company expects earnings to come within a range of $3.80 to $4.05 a share, excluding U.S. sales of heart drug Toprol XL, which is facing generic competition. This compares with a figure of $3.36 in 2006 on the same basis.

AstraZeneca said it expected sales of its key drugs to achieve a high single-digit percentage growth rate in 2007.

At 1115 GMT, AstraZeneca shares were up 1.3 percent at 28.76 pounds, reversing an initial fall on the results.

Industry analysts say AstraZeneca's immediate prospects are fairly healthy but they worry about long-term growth, following a series of late-stage pipeline failures and looming patent threats to some top sellers.

To address the pipeline gap, AstraZeneca has been hunting for drugs discovered outside its own research labs, and earlier on Thursday unveiled plans to buy unlisted British antiviral specialist Arrow Therapeutics for $150 million in cash [#msg-16682361]. The Arrow deal comes hard on the heels of two licensing agreements on Wednesday worth up to $800 million to expand AstraZeneca's presence in respiratory and obesity medicine.

The Anglo-Swedish group also this month agreed to sell two of Bristol-Myers Squibb Co's <BMY> experimental diabetes drugs in a deal that could bring Bristol-Myers more than $1 billion.

Despite a string of such product acquisitions in the past year, investors remain sceptical about AstraZeneca's portfolio of new drugs, and its shares trade on around 13.5 times forecast 2007 earnings against a European sector average of 16.2 times, according to Reuters data.

The next key test of the company's research credibility will come in March, when make-or-break clinical trial results for experimental heart drug AGI-1067 are due. Most analysts view the product -- a treatment for reducing plaque inside arteries -- as high-risk and likely to fail..
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