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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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April 3, 2013

AstraZeneca's Move To Hot, Happening Cambridge

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Posted by Derek

If you're looking for a sunny, optimistic take on AstraZeneca's move to Cambridge in the UK, the Telegraph has it for you right here. It's a rousing, bullish take on the whole Cambridge scene, but as John Carroll points out at FierceBiotech, it does leave out a few things about AZ. First, though, the froth:

George Freeman MP. . . the Coalition's adviser on life sciences, and Dr Andy Richards, boss of the Cambridge Angels, who has funded at least 20 of the city's start–ups, are among its champions.

"The big pharmaceutical model is dead, we have to help the big companies reinvent themselves," said Freeman. "Cambridge is leading the way on how do this, on research and innovation."

The pair are convinced that the burgeoning "Silicon Fen" is rapidly becoming the global centre of pharma, biotech, and now IT too. Richards says the worlds of bioscience and IT are "crashing together" and revolutionising companies and consumers. Tapping his mobile phone, he says: "This isn't just a phone, it could hold all sorts of medical information, too, on your agility and reactions. This rapid development is what it's all about."

. . .St John's College set up another park where Autonomy started and more than 50 companies are now based. As we pass, on cue a red Ferrari zooms out. "We didn't see Ferraris when I was a boy," says Freeman. "Just old academics on their bikes."
He adds: "That's the great thing about tech, you can suddenly get it, make it commercial and you've got £200m. You don't have to spend four generations of a German family building Mittelstand."

I don't doubt that Cambridge is doing well. There are a lot of very good people in the area, and some very good ideas and companies. But I do doubt that Cambridge is becoming the global hub of pharma, biotech, and IT all at the same time. And that "crashing together" stuff is the kind of vague rah-rah that politicians and developers can spew out on cue. It sounds very exciting until you start asking for details. And it's not like they haven't heard that sort of thing before in Britain. Doesn't anyone remember the "white heat" of the new technological revolution of the 1960s?

But the future of Cambridge and the future of AstraZeneca may be two different things. Specifically, Pascal Soirot of AZ is quoted in the Telegraph piece as saying that "We've lost some of our scientific confidence," and that the company is hoping to get it back by moving to the area. Let's take a little time to think about that statement, because the closer you look at it, the stranger it is. It assumes that (A) there is such a thing as "scientific confidence", and (B) that it can be said to apply to an entire company, and (C) that a loss of it is what ails AstraZeneca, and (D) that one can retrieve it by moving the whole R&D site to a hot site.

Now, assumption (A) seems to me to be the most tenable of the bunch. I've written about that very topic here. It seems clear to me that people who make big discoveries have to be willing to take risks, to look like fools if they're wrong, and to plunge ahead through their own doubts and those of others. That takes confidence, sometimes so much that it rubs other people the wrong way.

But do these traits apply to entire organizations? That's assumption (B), and there things get fuzzy. There do seem to be differences in how much risk various drug discovery shops are willing to take on, but changing a company's culture has been the subject of so many, many management books that it's clearly not something that anyone knows how to do well. The situation is complicated by the disconnects between the public statements of higher executives about the spirits and cultures of their companies, versus the evidence on the ground. In fact, the more time the higher-ups spend talking about how incredibly entrepreneurial and focused everyone at the place is, the more you should worry. If everyone's really busy discovering things, you don't have time to wave the pom-poms.

Now to assumption (C), the idea that a lack of such confidence is AstraZeneca's problem. Not being inside the company, I can't speak to that directly, but from outside, it looks like AZ's problem is that they've had too many drugs fail in Phase III and that they've spent way too much money doing it. And it's very hard to say how much of that has been just bad luck, how much of it was self-deception, how much can be put down to compound selection or target selection issues, and so on. Lack of scientific confidence might imply that the company was too cautious in some of these areas, taking too long for things that wouldn't pay off enough. I don't know if that's what Pascal Soirot is trying to imply; I'm not all that sure that he knows, himself.

This brings us to assumption (D), Getting One's Mojo Back through a big move. I have my suspicions about this strategy from the start, since it's the plot of countless chick-lit books and made-for-cable movies. But I'll wave away the fumes of incense and suntan oil, avert my eyes from the jump cuts of the inspirational montage scenes, and move on to asking how this might actually work. You'd think that I might have some idea, since I actually work in Cambridge in the US, where numerous companies are moving in for just these sorts of stated reasons. They're not totally wrong. Areas like the two Cambridges, the San Francisco Bay area, and a few others do have things going for them. My own guess is that a big factor is the mobility and quality of the local workforce, and that the constant switching around between the various companies, academic institutions, and other research sites keeps things moving, intellectually. That's a pretty hand-waving way of putting it, but I don't have a better one.

What could be an even bigger factor is a startup culture, the ability of new ideas to get a hearing and get some funding in the real world. That effect, though, is surely most noticeable in the smaller company space - I'm still not sure how it works out for the branch offices of larger firms that locate in to be where things are happening. If I had to guess, I think all these things still help out the larger outfits, but in an attenuated way that is not easy to quantify. And if the culture of the Big Company Mothership is nasty enough to start with, I'm sure it can manage to cancel out whatever beneficial effects might exist.

So I don't know what moving to Cambridge to a big new site is going to do for AstraZeneca. And it's worth remembering that it's going to take several years for any such move to be realized - who knows what will happen between now and then? The whole thing might help, it might hurt, it might make little difference (except in the massive cost and disruption). That disruption might be a feature as much as a bug - if you're trying to shake a place up, you have to shake it up - but I would wonder about anyone who feels confident about how things will actually work out.

Comments (33) + TrackBacks (0) | Category: Drug Industry History | Who Discovers and Why


COMMENTS

1. AndrewD on April 3, 2013 8:55 AM writes...

Derek, I know I will be accused of cynicism but I wonder if this is a move on AZ’s part to get government assistance. The current AZ base is in the constituency of George Osborne, the Chancellor of the Exchequer, and the move will become effective just as we move into the 2015 General Election. Nothing is as conducive to gaining government assistance as the idea that a politician may lose his seat at the next election, especially if said politician controls the purse strings.

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2. MoBio on April 3, 2013 9:11 AM writes...

Regarding "Getting One's Mojo Back through a big move": this reminds me of an anecdote often quoted in recovery programs:

"When an alcoholic gets on a plane in Seattle, an alcoholic gets off the plane in Cambridge"

Of course, one could use other other terms here but the sense is the same.

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3. Teddy Z on April 3, 2013 9:14 AM writes...

I like that that #1.
I also wonder if what it takes to re-calibrate expectations from Wall Street is for a company to fail. I am not hoping for AZ to fail, but it seems like it could go that way. I have always been struck (maybe in my naivete) that Wall Street has never changed its view of Big Pharma as a cash cow and that has driven most of the cost-cutting in the past decade or more. Big Pharma is still very profitable, but not the way it was in the past. Wall Street still wants returns like in the 90s, but the era of the Block Buster is over. I think Wall Street has not figured that out yet.

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4. petros on April 3, 2013 9:18 AM writes...

AZ actually had a big chunk of money recently for use in Gideon's constituency

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5. Chemist Turned Hedgie on April 3, 2013 9:29 AM writes...

As a subject of Her Majesty, I'm with you on this one, Derek. Of course, any complete look at AZ soundbites must include "achieve scientific leadership", but the one you cite is of comparable vacuity. In all likelihood, the move will simply create more instability in an R&D organisation that needs radical change like a hole in the head. Doubtless some will claim that this is yet another example of the markets driving slash-and-burn cost savings, but the truth is that the market is rather tired of AZN cost cutting (look at the PE multiple), and would rather see some revenue growth. Unfortunately, given 7 years of sleepwalaking to disaster, that is likely only to be achieved by significant M&A, which I realise is not without its issues...

#1- George Osborne has one of the safest seats in the country, with the Lib Dems a very distant second, so I don't see a political angle here- not much risk of another Martin Bell moment.

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6. Mr. Gladstone on April 3, 2013 9:38 AM writes...

"We trained hard, but it seemed that every time we were beginning to form up into teams we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing: and a wonderful method this can be for creating the illusion of progress, while producing only confusion, inefficiency and demoralization."

Caius Petronius - Roman Consul, 66 A.D.

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7. anon on April 3, 2013 9:55 AM writes...

Perhaps also

E) If we stayed put would anything change?

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8. Derek Lowe on April 3, 2013 10:04 AM writes...

#6, Mr. Gladstone:

That quote is apocryphal, though it's an accurate picture of reality. It doesn't appear in any of Petronius' surviving writings, and its first appearance in print seems to be Robert Townsend's "Up the Organization" (which is where I first encountered it years ago). He was well capable of faking the quote, but he may also have been passing along a still-earlier (mis)attribution.

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9. Pete on April 3, 2013 10:09 AM writes...

Will it be Soriot's Dien Bien Phu?

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10. Calymene on April 3, 2013 10:18 AM writes...

If you really want to know how much of a pharma / biotech hub Cambridge, UK, is, have a look at how many companies are recruiting for medicinal chemists. Clue: not many.

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11. (Spoofed identity - deleted) on April 3, 2013 10:29 AM writes...

Cambridge UK is a great place to do science so good luck to AZ, let's all hope it works out as planned. The industry needs good news. However, I think GSK have a better strategy @Stevenage with the Bioscience Catalyst. The Catalyst actually shares a site with a major R&D site and the location is very convenient for London with all its existing centers of excellence allied to the soon-to-be-built Crick Institute. A really productive symbiosis is already developing at the Stevenage site and the future looks even more promising. Open innovation is the Zeitgeist that is really rejuvenating R&D @GSK and there is a lot of excitement about where all of this is leading. Whether AZ can replicate the GSK story is an open question but it seems they too now "get" open innovation and are keen to gain some traction in this space!

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12. Virgil on April 3, 2013 10:30 AM writes...

Cambridge used to be cool, then in the mid '90s came the yuppies/a$$holes/nouveau-riche or whatever you want to call them.

Due to easy transport links to the capital (45 minutes to London by train), Cambridge now has some of the most overpriced real estate in the country. It's gotten to the point where

So yes, a shiny new glass and steel building on the outskirts of town staffed by BMW-driving drug industry executives is JUST what's needed, in a city where you have to be an independently wealthy trust fund kid just to eke out an existence.

But of course, expecting the drug industry to give a flying f*** about the communities it decimates would just be silly now wouldn't it.

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13. Virgil on April 3, 2013 10:32 AM writes...

(repost. a less-than symbol messed up my comment)
Cambridge used to be cool, then in the mid '90s came the yuppies/a$$holes/nouveau-riche or whatever you want to call them.

Due to easy transport links to the capital (45 minutes to London by train), Cambridge now has some of the most overpriced real estate in the country. It's gotten to the point where a 1000 sq.ft. row houses that used to rent for $1000 a month 2 decades ago are selling for $millions to financial industry commuters who leave town during the day then return at night to drink in $8 a pint pubs. The people who are the life-blood of the town - students and faculty - were long ago pushed to the outskirts where they can barely afford to live on the woefully small stipends the colleges pay (far lower than national average because everyone wants to be there so they can pay whatever they feel like). The entire food scene in town has been hijacked and priced out of reach for everyday folk. Traffic is horrendous because of course all these new arrivals have cars instead of bikes. Even the train is now expensive - a round trip to London costs 5 times what it did in the '90s, because that is what the market will bear.

So yes, a shiny new glass and steel building on the outskirts of town staffed by BMW-driving drug industry executives is JUST what's needed, in a city where you have to be an independently wealthy trust fund kid just to eke out an existence.

But of course, expecting the drug industry to give a flying f*** about the communities it decimates would just be silly now wouldn't it.

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14. Anonymous on April 3, 2013 11:14 AM writes...

Agilist is visiting an AZ thread! Cool!

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15. anchor on April 3, 2013 11:16 AM writes...

Nothing is going to happen to any one any time soon in the big pharmaceutical business and that includes AZ! If they were up to doing something meaningful and if their business model is correct they will not publicize! The convoluted dynamics in this business is changing and changing faster than you can provide a reasonable solution! For many companies it is not how much I can make, but how can I cut my loses and it is as simple as that. Rest is assured that we will be talking about this issue for some time to come.

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16. Anonymous on April 3, 2013 12:26 PM writes...

"Open innovation is the Zeitgeist that is really rejuvenating R&D @GSK"

If anyone can come up with a more vomit-inducing sentence than this I'd be surprised. (#11), please just suck up to the bosses in private eh? Thanks

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17. Dr. Manhattan on April 3, 2013 12:44 PM writes...

"We've lost some of our scientific confidence,"
along with a lot of their scientists with incessant layoffs.

With regard to #16's comments, (spoofed identity of earlier comment deleted). That is the solution! If only the rest of us had enough "Big Data"...

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18. Mr. Gladstone on April 3, 2013 12:45 PM writes...

#8 Derek,

My apologies. The quote is not apocryphal - my typing is poor. The attribution should be Gaius Petronius NOT Caius Petronius.

Point is axiomatic....this has been going on for a VERY long time and leads to little real value.

Attached is the link:

http://davidtjones.wordpress.com/2009/05/21/the-perils-of-re-organisation-gaius-petronius/


Mr. Gladstone

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19. Ricardo Rose on April 3, 2013 12:58 PM writes...

How well did the move to Cambridge UK work for Pfizer? That would be a closer benchmark of things to come based on reality.

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20. Hap on April 3, 2013 1:01 PM writes...

"The big pharmaceutical model is dead, we have to help the big companies reinvent themselves," said Freeman. "Cambridge is leading the way on how to do this, on research and innovation."

Really? Have the people involved invented or reinvented anything? I didn't think Silicon Valley needed its own angel group to drum up business, and probably not Massachusetts, either. I wouldn't imagine Boston would be foaming at the mouth for AZ to show up - they have plenty, and if they don't, they can always get more. I'm not sure they've invented Cambridge as a business center, much less as anything useful. Why should I believe they can reinvent AZ, or pharma?

Cambridge has a lot of smart people, but I'm sure AZ does, too - either out of bad organization or cross-purposes, they haven't been able to be what they want with their company, and I don't think that that's a problem of intelligence, but of organizational skill and motivation. Again, the presence of those qualities wouldn't require the presence of AZ - whoever had it would be trying to calm the citizenry and export businesses elsewhere in Britain.

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21. Anonymous on April 3, 2013 1:38 PM writes...

@16, well said.
I wonder if (#11's) colleagues who didn't survive the cuts in December (coincidently the
ones who don't regurgitate the latest PR dribble in public) share his excitement.
Excitement is getting a bit thin on the ground over at UM also.

(#11), so the catalyst is over flowing with amazingly innovative start-ups all of a sudden?
I must have missed the press releases.

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22. Anon1 on April 3, 2013 2:45 PM writes...

I completely disagree with the CEO. I've met plenty of very confident scientists who refuse to take any risks (AZ had plenty of them, likely still does). Scientists who are willing to take risks aren't necessarily excessively confident, but are instead creative and inquisitive. Big difference between the two types of people. Very big.

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23. Anonymous on April 3, 2013 2:54 PM writes...

I thought (#11)'s post was a p*** take when I first read it!

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24. MTK on April 3, 2013 5:58 PM writes...

I gotta sort of agree with anon #7.

I'm not saying this move will result in big advancement, but clearly the status quo for AZ is not the answer. They're in dire straits.

As for organizational confidence and company culture I definitely think the two exist IMO. There's a certain aura that exists with some companies. It usually starts with a charismatic leader and filters down then at some point starts percolating back up resulting in a distinct culture.

@22, I don't think he was talking about individual confidence, but organizational, as in "I'm pretty sure other disciplines or management will screw this up, so why bother."

In that respect the move itself is not going to change AZ, it's also going to take someone with serious leadership and organizational talent. And no, I have no idea who that may be.

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25. Ed on April 4, 2013 12:49 AM writes...

Well, lets hope that they can find HR people that can spell before the big move...

http://goo.gl/vPdNU

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26. Nick K on April 4, 2013 12:56 AM writes...

#11: Is Agilist now posting under his real name?! If so, do you really believe the drivel you post here?

As for AZ's move from Alderley Park to Cambridge, I fail to understand the logic of closing a fully functional, well-equipped site to open a new one elsewhere. Could someone explain to me exactly HOW this is going to improve their appalling productivity?

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27. Anonymous on April 4, 2013 2:35 AM writes...

#26 It is logical and perfectly explicable:

1. Alderley Park has not been producing the goods for whatever reason.
2. The AZ top brass can either do nothing or something.
3. Since they're paid to work, they feel they must act.
4. Development times for drugs are longer than serving times for CEOs, so the outcome of the reorganisation is of no consequence (whether it be positive or negative)

In their shoes, we would do the same thing, because it makes sense.
Of course we have no way of knowing if this will improve AZ's productivity.

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28. Ricardo Rose on April 4, 2013 3:13 AM writes...

@27 - But the serving times of most senior and middle management is much longer than their corresponding CEOs. It is their responsibility to keep a finger in the pulse of the groups, and this is where things have gone seriously wrong.

This new management cast, which behaviour we have imported from other industries together with their horrible productivity "tools", don't feel they have to protect and nurture their groups, they rather spend time alienating scientists and not fighting to have a stable environment.

The problem of most big pharma? Well you just have to look at the organisational layers - I do remember cases in which from CEO to a new scientist entering the organisation there were 14 layers of management ... and from what I understand AZ was going down that route. So, maybe, this will be a positive, that is reduce the number of layers, flatten the structure. But, unfortunately, from what we have seen before, they will get rid of good scientists and keep the dubiously productive managerial cast.

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29. Anonymous on April 4, 2013 3:41 AM writes...

#28: I broadly agree with you, however the idea of high level people looking after their teams? That ship has sailed.
When we entered the post-blockbuster era, we lost job security. Loss of job security led to less (although I can't say how much) objectivity and creativity. Who gambles on a project and potentially leaves themselves open to being next out the door? Because you can be certain that as night follows day, when it comes to losing bodies, creativity and similar traits are way down the list of 'qualities-that'll-keep-me-here'. Obsequiousness, non-threatening aspirations and an ability to toe the line are the key considerations...

I fear that we're entering the territory of humans, fallibility and organisations in general....

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30. Chris Swain on April 4, 2013 3:45 AM writes...

A few thoughts regarding the pharma industry around Cambridge. Whilst there are no massive pharma sites there is a burgeoning industry made up of spin outs like Convergence, small companies like Astex and academic start ups like KuDOS (which was ironically bought by AZ and closed!). The Babraham research site is expanding it "Bioincubator" facilities. There are also a number of CROs on the M11 corridor BioFocus, Argenta, Selcia. I can perhaps see why AZ might want to be part of this but I'm not sure it well fit with the AZ big Pharma culture. More likely it will be a small, fairly independent unit and probably few moving from AP.

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31. Anonymous on April 4, 2013 4:37 AM writes...

#Ed, 25 - that made me laugh

The sad thing is in the current UK job market they will still be over run with good applicants for the positions they are advertising.
Anyone who gets an offer needs to think long and hard.

On the flip side, Alderley would be an interesting place to go for an interview just now!

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32. Anonymous on April 4, 2013 4:48 AM writes...

AZ aren't interested in Cambridge being a pharma hub. IF this move happens it will be about biopharms

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33. cliffintokyo on April 5, 2013 2:24 AM writes...

I missed the core discussion, but it seems likely that the final 2 or 3 comments are homing in on the real objectives.
Derek mentioned 'Big Pharma Mothership Culture', and if doing something, rather than nothing, is on the agenda, gettng away from this mindset for the scientific crew would be essential. AZ may well wish to hire a 'charismatic science leader' for this new R&D center; indeed starting with a 'clean slate site' that is in close touch with a hot innovation culture may be a requirement from an already identified candidate.....AP will probably become a Development Center. As noted in a comment, its too expensive to abandon all that established S&T, but AZ will have to beware of a 'them and us' culture springing up.

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