AstraZeneca

Summary

On 6th April 1999, AstraZeneca was formed through the merger of Astra AB of Sweden and Zeneca Group PLC of the UK, propelling the company to second in the world in terms of pharmaceutical sales. Since the merger, AstraZeneca has maintained its position as one of the world's leading pharmaceutical companies having never left the top five companies in terms of pharmaceutical sales. Corporate headquarters are now based in London, UK; whilst R&D headquarters are in Sodertalje, Sweden.

Fiscal 2007 was a strong year for AstraZeneca, with double-digit growth recorded in revenue. This was achieved as a consequence of strong sales reported for AstraZeneca's eleven key blockbuster products. Furthermore, AstraZeneca has increased its R&D spending by 32.3 per cent, investing over US$5 billion, in order to mitigate the major pipeline setbacks of fiscal 2006.

With the R&D pipeline decreasing and lacking late-stage compounds, AstraZeneca adopted an aggressive acquisition strategy during 2006 and 2007, which has seen the company purchase several leading biotech companies with combined costs of nearly US$17 billion. The most important acquisitions have been of Cambridge Antibody Technology and MedImmune, which have bolstered the pipeline with an additional 14 candidate compounds. The purchase of MedImmune in particular has been significant to AstraZeneca, adding three new products to the company's portfolio, including one blockbuster in Synagis. According to AstraZeneca, MedImmune has a a further 100 biologics in development. AstraZeneca has supplemented this acquisition activity with a number of research and licensing agreements. Consequently, in 2007, the company's pipeline and product portfolio is good shape to maintain current growth rates.

AstraZeneca's key products will remain Crestor and Seroquel, both of which are forecast sales remaining above US$3 billion by 2012, and both expected to challenge for leadership within their respective markets. The company's gastrointestinal and oncology therapeutic areas are forecast to make increasingly diminished contributions to revenue due to patent expiries. However, growth is expected in AstraZeneca's infection and respiratory/inflammation areas, which have been considerably expanded following the acquisition of MedImmune. Overall, it would seem AstraZeneca has overcome its setbacks in R&D and with its recently acquired companies, is well set to maintain its position as one of the top five global pharmaceutical companies in terms of revenue.

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