Squeeze on success for AstraZeneca
Vikki Allen/London, UK
October was a tough and busy month for AstraZeneca. But it is how the company progresses from here on that will interest investors, particularly in light of the company's plans to 'streamline', coupled with the failure of its new oral anticoagulant - Exanta - to gain approval from the US Food and Drug Administration (FDA).
At AstraZeneca's annual business review at the beginning of October all of the company's representatives, along with the chief executive officer, Sir Tom McKillop, were determined to look towards a positive future for AstraZeneca.
McKillop indicated that all business was now under the microscope, warning that steps must now be taken to 'streamline all our activities'. McKillop gave a polished introduction at the meeting outlining the challenges to the pharmaceutical industry as a whole, citing increased pricing pressures and escalating costs leading to a classic margin squeeze and a rather hostile environment.
However, he insisted that streamlining would be all about 'upping productivity' and apparently 'not to do with planned job cuts'.
Definite notice of rejection of the anti-clotting drug, Exanta (ximelagatran) by the US FDA came just two days after the business review meeting but was no surprise following a meeting earlier in the year with the FDA's cardiovascular renal committee, at which the drug was not recommended.
The FDA decided that the potential risks from the drug out-weighed any potential benefits. The drug has been associated with raised levels of liver enzymes, which might represent a sign of organ damage in some patients.
Although the anticoagulant might not realise its reported potential as a $3 billion (£1.7 billion) per year seller, the news isn't all bad. The drug has already been approved for use in Europe for patients following orthopaedic surgery and stands as the first real clinical alternative to warfarin.
Realising that Exanta was unlikely to gain FDA approval, McKillop told delegates attending the business review in London that he believed the FDA had 'got it wrong'. The FDA advisory panel was responsible for 'misjudging the huge medical need and failing to work with us to explore the safe use of Exanta,' he said.