Thursday, February 14, 2008

AZ Makes Its Move in GI

Back in November we broke the news that AstraZeneca may be spinning out its gastrointestinal R&D. (Those news outlets that only read the Swedish papers caught up on the news this week.)

Well we can report now that the Big Pharma has made its move, though it's not the move that some reports were salivating after. In fact, it's quite modest in scope compared to most rumors, even if it is a strategic leap for AstraZeneca.

AZ has teamed with Nomura Phase4 Ventures to create a new Swedish biotech, Albireo, around one clinical and an undisclosed number of preclinical GI assets from AZ. David Chiswell, a founder of Cambridge Antibody Technology and a man who knows his way around the European biotech scene, is the firm's executive chairman.

AZ is hanging onto a significant minority interest in the newco, which has raised $27 million out of a planned total $40 million Series A from Nomura, TVM Capital, and Scottish Widows Investment Partnership. AZ retains its GERD franchise (namely the blockbuster Nexium) and reflux R&D.

As we said at the time: AZ is simply too big to manage the internal research it’s got – let alone depend on the notion that it can afford big bets on areas unlikely to generate big advances in medical care. (For an in-depth discussion of GI R&D strategies, see this story in the November IN VIVO).

It isn't the first pharma to spin off its GI assets--Movetis took a handful of Johnson & Johnson projects when it spun out backed by €49 million from Sofinnova et al. back in early 2007. But this is the first such move in any therapeutic area from AZ--a taste of what's to come?

image from flickr user red5standingby used under a creative commons license

1 comment:

Anonymous said...

The WSJ is spinning this deal as pharma "disintegration", ten years ago we termed it disaggregation, and it has its root in observing how companies that rely strongly on blockbusters have serious growth problems and what other industries have done to address the issue: disaggregate.

Astra once had 60%of revenues from one (1) product: omeprazole, a GI drug. Spinning this sell out of the unperforming (omeprazole and since then what?) Molndal facility now as disintegration is however wrong. Otherwise Biovitrum, Basilea and Actelion also would be, they are however stand-alones.
Further, AZ just integrated MedImmune and CAT, so they (AZ) have not yet fully understood and embraced the disaggregation model.

Finally, there is no strategic value in only late stage trial execution paired with marketing. In fact you would want to keep early stage clin res and marketing, if anything, as those two are the only functions that will give you the scientific edge to succed in the market place dominated by understanding the science (research gives the science, marketing the customer focus).

If as company you decide you can't manage R&D, maybe you are in the wrong business altogether. Why then not be a generics play, be good in manufacturing and distribution.