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Pfizer Abandons Bid for AstraZeneca Regardless of Valuation of its Future Financials: The Destiny of Drug R&D Pipelines – The Case of AstraZeneca

Reporter: Aviva Lev-Ari, PhD, RN

UPDATED on 9/3/2014

‘Back to normal’ for AstraZeneca CEO, despite Pfizer rumors

 

(Reuters) – Though speculation is rife of a new Pfizer bid, AstraZeneca’s chief executive is not holed up with advisers in London or New York. Instead, he has spent the last three days immersed in heart science in Barcelona.

“The only thing I can tell you is I am here – and imagine where I would be if something was happening!” Pascal Soriot told Reuters on the sidelines of the European Society of Cardiology congress, the world’s largest heart meeting.

Strict British takeover rules limit what Soriot and other players can say about Pfizer’s abortive attempt to buy AstraZeneca and the possibility of a resumption of talks.

But chatter among investors that Pfizer will come back has boosted shares in Britain’s second biggest drugmaker more than 10 percent since the middle of last month, and the ending of the first of a two-stage cooling-off period on Aug. 26.

While Pfizer cannot launch another public bid until late November, AstraZeneca can now invite it back for talks and Pfizer also has one shot at making a private approach.

Although the saga may not be over, Soriot remains adamant AstraZeneca has a strong independent future.

“We are making good progress with the pipeline and everything so far – touch wood – is going in the right direction,” he said. “We’re back to normal.”

Soriot has spent his time in Barcelona focused on the heart drug Brilinta, which AstraZeneca flagged as worth a potential $3.5 billion-a-year in a strategy update that formed a central plank of its defense against Pfizer.

Sales of the drug have disappointed investors so far, totaling only $216 million in the first half of 2014, but they should pick up following the closure of a U.S. probe into a big clinical trial that had worried some doctors, Soriot said.

“It’s very clear that Brilinta will, actually, in the end make it,” Soriot said, adding he had been encouraged by feedback from key opinion leaders in Barcelona, as well a new study showing the drug was safe to use in ambulances.

SOURCE

http://www.reuters.com/article/2014/09/02/us-astrazeneca-pfizer-exclusive-idUSKBN0GX1C720140902

UPDATED on 5/27/2014

Pfizer Abandons Bid for AstraZeneca

 

By JENNY ANDERSON MAY 26, 2014 10:39 AM

 

<a href="http://dealbook.nytimes.com/2014/05/26/pfizers-says-its-bid-for-astrazeneca-is-dead/?_php=true&_type=blogs&emc=edit_dlbkam_20140527&nl=business&nlid=40094405&_r=0[/embed]%20">http://dealbook.nytimes.com/2014/05/26/pfizers-says-its-bid-for-astrazeneca-is-dead/?_php=true&_type=blogs&emc=edit_dlbkam_20140527&nl=business&nlid=40094405&_r=0 

The Destiny of Drug R&D Pipelines: The Case of AstraZeneca – Valuation of its Future Financials 

Reporter: Aviva Lev-Ari, PhD, RN

May 21 (Reuters) – AstraZeneca ‘s shareholders remain split over the UK pharmaceuticals giant’s decision to reject a $118 billion offer from U.S. rival Pfizer, with AXA coming out against it while Threadneedle supported it.

“It is the view of AXA IM UK that the board of AstraZeneca should not prevent an offer from Pfizer of 55 pounds ($92.67) per share from being put to the shareholders of the company,” Jim Stride, head of UK equities at AXA Investment Managers <AXAF,PA>, said on Wednesday.

AXA is the third biggest shareholder in AstraZeneca, with a 4.51 percent stake.

“Many shareholders – but not necessarily all – will find this an attractive offer. Accordingly we believe that the board was arguably wrong and acted too hastily to dismiss the latest proposal from Pfizer,” Stride added.

Meanwhile Threadneedle, which is the fifteenth biggest shareholder with a 1.39 percent stake, said it supported AstraZeneca’s decision to reject Pfizer’s proposal.

“As long-term investors in AstraZeneca, we continue to support the board’s stance on the Pfizer offer. We feel the full implications of the proposed acquisition have not been sufficiently understood and addressed by Pfizer,” a spokeswoman for Threadneedle said.

“The company has made notable progress under (Chief Excecutive) Pascal Soriot and is a strong, stand-alone UK business with a good product pipeline.” ($1 = 0.5935 British Pounds) (Reporting By Jemima Kelly; Editing by Chris Vellacott)

 

SOURCE 

http://www.reuters.com/article/2014/05/21/idUSL6N0O73S520140521

 

5/19 3:23AM – Chairman of AstraZeneca REJECTS the FINAL Offer of Pfizer explaining the Progress in Pipeline of defense Immunotherapy in Cancer, the NEW SCIENCE will bring good value to shareholders.

VIEW VIDEO

http://www.reuters.com/video/2014/05/19/so-why-did-astrazeneca-reject-pfizer?videoId=312996516

On Sunday, Pfizer made what it called its “final” $119 billion offer for AstraZeneca, which is based in London. Pfizer also stated that while it wanted a deal, it was only making a soft “nonbinding” offer at this time.

Pfizer said it would not start a full-fledged hostile offer for AstraZeneca. A hostile bid would have involved offering terms that AstraZeneca’s shareholders could accept without the approval of AstraZeneca’s board. Given the price Pfizer offered, such a maneuver had a real chance of success.

http://dealbook.nytimes.com/2014/05/19/the-curious-incident-of-pfizers-final-offer-for-astrazeneca/

Schroders, Fidelity reveal investor split as Astra rejects Pfizer

SOURCE

http://www.theguardian.com/business/2014/may/19/pfizer-failed-takeover-bid-astrazeneca

AstraZeneca Snubs Pfizer Once More

By CHAD BRAY

MAY 19, 2014, 3:23 AM 16 Comments

SOURCE

http://dealbook.nytimes.com/2014/05/19/astrazeneca-rejects-final-offer-by-pfizer/?_php=true&_type=blogs&_r=0

Nature Reviews Drug Discovery (2014) doi:10.1038/nrd4309

Published online 16 May 2014

The portfolio review

• Abstract•
• Introduction•
• The portfolio review•
• Key factors underlying project failures•
• Conclusions: what AstraZeneca did next•
• References•
• Acknowledgements•
• Author information•
• Related links

In 2011, a comprehensive review was undertaken of 142 drug discovery and development projects at AstraZeneca. The review covered projects from all therapeutic areas that had been active during the 2005–2010 period, from the phases following the completion of preclinical research through to the end of clinical testing in Phase II. The key aims of the review were to understand the major reasons for project closure and to identify the features of projects that correlated with successful outcomes.

We did not expand the review to look at Phase III for two reasons. First, successful transition through proof of concept (Phase II) remains the area where the industry overall has the highest rate of attrition and which must be improved. Second, the number of projects in Phase III for a single company is too small to be able to draw valid conclusions, and this number becomes even smaller if looking at successful transitions to launch of a medicine.

It should be noted that this is a single assessment from a single company, based on a limited number of projects, and over a limited timeframe. Nevertheless, we think that insights from this work could help to guide future teams and improve R&D productivity.

Methods. The aim of the review was to identify key ‘lessons learned’ in projects that could be used to improve the R&D productivity of the company. As such, the review was performed by a cross-functional group of scientists and clinicians drawn from the project team community, and conducted in a peer-to-peer manner. To be as objective as possible, structured questionnaires were used when interviewing teams and, where possible, contemporaneous documents were analysed to provide supporting evidence for assessments. In addition, to further avoid any potential bias, senior leaders who had been associated with the governance decisions over the assessment period were not involved in the review.

For this analysis, the drug development process was divided into four distinct phases: preclinical, Phase I, Phase IIa and Phase IIb. The preclinical phase was defined as the phase from the first good laboratory practice (GLP) toxicology dose of a candidate drug through to an investigational new drug (IND) application or first clinical trial application (CTA) before first-in-human testing. Phase I was defined as the phase that included the first-in-human trials within a small trial population (typically <50 patients) and included safety, tolerability and dose-ranging studies. These studies were often conducted in healthy volunteers, but in some indications (for example, oncology) they could include patients. Phase II trials were defined as trials that were aimed at evaluating the candidate drug’s efficacy in a patient population, leading up to clinical proof of concept. Within our analysis, we subdivided Phase II into Phase IIa and Phase IIb. Phase IIa studies were generally smaller (typically <200 patients) and designed to mainly address early evidence of drug activity, whereas Phase IIb studies included larger numbers of patients (typically <400 patients) and were designed to demonstrate clinical proof of concept and an understanding of dose response.

For each of these phases, projects were classified as being ‘active’ (still in that phase), ‘closed’ (shut during that phase) or ‘successful’ (transitioned from this phase to the next one). Every project was analysed separately in each phase of its development path; so, for example, a project that had reached Phase III trials was analysed four times across the entire development process. Data were collected for each project, for each of the development phases that it had completed, using comprehensive surveys and questionnaires with over 200 questions covering all aspects of the project (for example, the scientific rationale, target validation and physicochemical properties of the candidate drug). Questionnaires were adapted so that they were specific to each phase of the review to allow for the retrospective understanding of the data that were available for a project at that stage, and to analyse how the project knowledge and data developed as the project passed through different phases. Written surveys were supplemented with in-depth peer-to-peer interviews with project teams. Responses to the questionnaires and interviews were subjected to rigorous peer review by a team of experienced scientists and clinicians to ensure consistent evaluation across all projects. In-depth ‘root-cause’ analysis was used to reach conclusions as to why projects had failed. Analyses that were based on answers to specific questions in the questionnaires were only performed on projects that had provided a complete set of answers to the relevant questions.

Results. Overall, we gathered data from more than 80% of the 142 AstraZeneca projects within the scope of the review, and for 95% of projects in clinical phases. Of the projects analysed, 94 closed during the period assessed; 33 closed before clinical testing and a further 61 closed during clinical testing. The remaining projects were still active at the time of this review.

We compared the success rates for our projects to pharmaceutical industry benchmarks, obtained from the Pharmaceutical Benchmarking Forum (Fig. 1a). Our success rate in the preclinical phase (defined as the percentage of projects completing this phase and moving to the next phase of development) was comparable with industry benchmarks (66% versus 63%; see the KMR Group website for further information on the Pharmaceutical Benchmarking Forum).

Our data suggested that we had a higher success rate in completing Phase I (59% versus 48%) but a markedly lower success rate in completing Phase II (15% versus 29%), compared to industry benchmarks. In addition,

Phase III success rates were lower than the industry overall (60% versus 67%), although the number of projects in this phase was very low. Therefore, AstraZeneca was allowing more projects to enter later-stage development, only to have them subsequently fail.

Overall, AstraZeneca’s success in bringing candidate drugs to market during the 2005–2010 period was significantly lower than the industry median (2% versus 6%).

 SOURCE

http://www.nature.com/nrd/journal/vaop/ncurrent/full/nrd4309.html#the-portfolio-review

 

At AstraZeneca, Occasion for Introspection By Aaron Krol May 19, 2014 | On Friday, a frank assessment of AstraZeneca’s R&D practices appeared in Nature Reviews Drug Discovery. The review, written by members of the pharmaceutical company’s Innovative Medicines and Early Development division, examined projects in preclinical, Phase I and Phase II trials from 2005-2010, and reached some stark conclusions about the corporate culture’s influence on which compounds advanced through successive stages of testing. At the same time, the review offers new reasons for optimism, and may be seen to bolster AstraZeneca in its ongoing battle to resist acquisition by Pfizer. While the top-line figures are glaring – in particular, the observation that AstraZeneca was letting an exceptional number of compounds through Phase I trials, compared to the industry as a whole, only to see disproportionate failures in Phase II – the authors’ substantive look at the causes of failure is enlightening. A lack of confidence in the underlying biology of therapies seems to have been a frequent reason for failure, even in later stages of a project. In 40% of cases where lack of efficacy led to a project’s shutdown, teams reported that they “lacked data demonstrating a clear linkage of the target to the disease or access to a well-validated animal model of the disease,” and as late as Phase IIb trials, over 40% of teams reported “low confidence” in their molecular targets. In these cases, weak evidence of efficacy in preclinical models may have been enough to move projects forward, despite no strong hypothesis linking a lead drug to the disease pathology. The authors also noted that a more well-rounded view of the biology was a powerful predictor of success. At the time of the review, only 27% of Phase II trials had failed where teams reported that their drug target had a known genetic link to the disease in humans, and only 18% of Phase IIb trials had failed if teams reported that they began testing with a biomarker for efficacy in mind. “Overall,” the authors write, “these data highlight that, throughout every phase of early R&D, it is crucial for scientists and clinicians to gain an understanding of, and confidence in, the disease biology, the relationship of the target to the disease indication, and the proposed mechanism of action of a potential drug.” While the problems identified in this review will look familiar to many working in the pharmaceutical industry, they seem to have grown particularly entrenched at AstraZeneca. The authors note that projects were frequently advanced because teams were evaluated by volume of compounds in active testing, creating a perverse incentive to promote any candidate drug that could meet minimal standards of evidence. One indicator of this culture is the lack of diversity in back-up molecules, meant as potential replacements for a lead candidate in certain key projects. The authors found that back-up molecules were often only minor tweaks of the lead candidate, advanced with no reason to believe they would differ in activity or outperform the lead drug on any metric. “In one extreme case,” they write, “we identified a project with seven back-up molecules in the family… [which] all failed owing to the same preclinical toxicology finding.” Although the review was completed in 2011, it has been published at a fortuitous time for AstraZeneca, which has fought off repeated takeover attempts by Pfizer, including an offer of $117 billion over the weekend. There has been frequent speculation that AstraZeneca’s shareholders may rebel against the wishes of the board and accept a high bid by Pfizer, which is offering a high premium over the market value of AstraZeneca shares. While AstraZeneca’s board members insist that Pfizer is still undervaluing their drug portfolio, skeptics note that AstraZeneca has struggled to bring new drugs to market in recent years. This report offers reasons to believe that the company’s R&D practices may have changed since 2011, with a new emphasis on biological understanding over volume. The authors note that the company’s early development portfolio is significantly smaller than it was three years ago, and that teams are now expected to articulate their hypotheses relating drugs to disease targets, and more encouraged to seek out relevant biomarkers, companion diagnostics, and patient subpopulations. While acknowledging that “it is too early to see tangible benefits to the AstraZeneca pipeline,” they also observe that both preclinical and Phase II success rates have risen since the new R&D philosophy was implemented, while inflated Phase I success rates have fallen. While the timing may be coincidence, for AstraZeneca boosters looking for evidence to point to when arguing that Pfizer’s takeover bids undervalue the flagging company, this review will be a welcome addition to the public record. For everyone else, it is an instructive glimpse into misguided incentives at the root level of the drug industry. SOURCE http://www.bio-itworld.com/2014/5/19/astrazeneca-occasion-introspection.html