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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« Harvard's Had Enough | Main | That's Some Fine Editorial Work There »

April 24, 2012

AstraZeneca Buys Ardea. And Who Else?

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Posted by Derek

Since I've mentioned Ardea Pharmaceuticals and their gout drug RDEA594 (lesinurad) here a couple of times, I should note that AstraZeneca has decided to put up over a billion dollars to buy the entire company.

It's not surprising to see AZ getting the wallet out, considering the company's overall problems, which are also, naturally, the source of all the relentless cutbacks they've been announcing. I will not, however, endorse the following statement from the company's head of R&D:

"We’re building some momentum here in R&D,” Martin Mackay, head of research and development, said in a telephone interview today. “I would be disappointed if we didn’t announce further deals by the end of this year. We’ve taken our hits but we’re turning a corner.”

Comments (13) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. bbooooooya on April 24, 2012 9:22 AM writes...

What? AZN has proved that it can't do productive research on its own, so it stands to reason that it should be good at identifying productive research from other companies and simply acquiring these other technologies. No logical fallacy there......

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2. Retired on April 24, 2012 9:26 AM writes...

I am ashamed to admit that I know this person, he has not changed in all these years. What he knows about R&D you could fit in a matchbox.
Those poor people at Astra.

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3. DCRogers on April 24, 2012 9:59 AM writes...

Given Mr Mackay would be "disappointed" if he didn't announce further deals by the end of the year, I am assuming someone's bonus plan is structured to take that very measure into account.

It's the curse of management by objective -- it's easier to confirm a short-term purchase than longer-term R&D productivity.

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4. OldLabRat on April 24, 2012 1:35 PM writes...

Mackay is running the same "strategy" at AZ that he used at Pfizer. We all know how that turned out. Why do companies keep hiring Mackay? Perhaps that's the question.

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5. SteveM on April 24, 2012 2:10 PM writes...

It's tough getting worked up about AZ and Eli Lilly patent expirations given that much of the exclusivity revenue came from 2 garbage drugs, (Seroquel & Cymbalta) that were/are heavily prescribed off-label to unsuspecting victim-patients.

Unfortunately, the Pharma scientists get caught up in the fetid backwash of the Reptilian MBA's in Corporate.

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6. Anonymous on April 24, 2012 2:19 PM writes...

@OldLabRat

It is to do with networking and 'experience' - and that is what AZ bought.

They did not try to or succeed in buying a drug discoverer. If you think that is important then that is why you are not at the dizzy heights of the Pharma business. And is also why the business is collapsing.

AZ have actually no logical choice other than to buy companies and hope they get lucky (I agree with #1 here) that someone actually has something decent. They have left it too late to re-invent themselves as a Drug Discovery centre and with the middle and upper management still stuffed with Mackay-lites, taking the cash and watching their backs until the cash runs out then they are in the classic 'death spiral' and will not escape.

RIP Sir James Black

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7. Anonymous on April 24, 2012 2:37 PM writes...

'R & D' for big pharma appears to apply more to researching the risk/benefit of acquiring new products and then developing them through phase III & commercialization. But perhaps that's the best role for big Pharma?

Thinking of them as drug discovery centers is a bit nostalgic. They're probably better characterized as large publishing houses that edit, copy and distribute very well but aren't good at all at generating new valuable work.

Excuse the bad analogy but why expect them to hire a thousand monkeys to type when they can just buy a book that needs to be edited and marketed?

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8. DrSnowboard on April 24, 2012 3:43 PM writes...

1.26 billion looks cheap compared to Medimmune, given that they were supposed to fill the pipeline on their own. Shame about that Synagis followup, eh?

I seem to remember the sobriquet being 'Slasher Mackay'? Obviously he believes he's turned the corner, but the cliff is still there.

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9. Dr. Manhattan on April 24, 2012 5:11 PM writes...

" ...too late to re-invent themselves as a Drug Discovery centre and with the middle and upper management still stuffed with Mackay-lites, taking the cash and watching their backs until the cash runs out then they are in the classic 'death spiral' and will not escape."

Now all they need is Rod MacKenzie to complete the set. Collect them all, trade them with your friends...

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10. Ken on April 24, 2012 7:03 PM writes...

SteveM:

Seroquel isn't a great drug, but at least it was an NME. Nexium, on the other hand, is one of the greatest scams in the history of Pharma.

I do question your labeling of Cymbalta as a "garbage" drug. If you look beyond the pervasive Direct-to-Consumer advertising, it is rather unique in that it consistantly shows efficacy as an analgesic. I know quite a few doctors who swear by duloxetine for treating DPNP for example, because it flat out works. I have no clue why anyone would write a branded antidepressant to treat MDD in this day in age with so many good generic SSRIs available... but I think you're overreaching by calling duloxetine garbage.


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11. John on April 25, 2012 12:28 AM writes...

This deal is far too expensive. As a seller, the higher the price, the more profit it will make. As a buyer, the more it pays, the less return it will get. I am not sure why this company is worth that much money. There are two clinical compounds one for gout and the other for cancer. The one for gout is not a first-in-class drug. It is not a best in class compound either. It is still in clinical trial. There are still many uncertainty associated. The the phase II results couldn't be confirmed in the larger phase III trial, then it won't become a drug. For the cancer compound, there isn't much value. It is not used for a unmet medical usage. Again it is a me too compd. At most it might offer a little better safety margin compared with the already marketed drug. It might be a little more potnet. But again the bottom line is there is already a drug of the same class there. What is the real value. Who made this deal is really questionable. It is true that the licensing or outreach department also has an annul goal like all the other divisions in a pharmaceutical company. If they don't do any deal within a long period of time, they could face do or die situation. No one wants to pay somebody for doing nothing. After a big transaction, these people could claim the credit at least for the current. Sinc the compds are still in clinical trial, it will take a long time to confirm this is a good deal or not. By then, the whole management team might be changes. In that case people intend to forget who made the deal, where and when. At least this year is a good year for these people. It is good for them. They have achieved their annual goals.There are so many examples when some companies or some compds are sold at an unreasonable price. Who pays these bills?

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12. Calvin on April 25, 2012 3:12 AM writes...

best quote for me is "The company would consider acquiring late-stage assets outside its research and development focus on cancer, diabetes and gastrointestinal ailments, he said." So basically confirms that the strategy though up back in 2010 doesn't cut the mustard. Realised that exiting HCV looked....well....dumb?

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13. Henry Wlfe on April 30, 2012 8:17 PM writes...

Ardea??? for $1.25 B??? for what a phase 3 drug going up as a 3rd tier prior auth drug after generic allopurinol...enjoy

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