Despite the recent $15.6bn acquisition of MedImmune, the sheer number of AstraZeneca employees at BIO-Europe 2007 indicates the group's hunger for new products. The UK pharmaceuticals group fielded 26 executives, all of whom were involved in business development and licensing.
The AstraZeneca scouting team significantly outnumbered those from other companies, who are also known for their deep pockets and fondness for small biotechnology groups. Johnson & Johnson only managed a put out a squad of 19, while Pfizer sent seven executives to ferret out new drugs for its pipeline.
Notwithstanding recent reassurances from David Brennan, AstraZeneca’s chief executive, that the group’s pipeline has been strengthened by its recent string of acquisitions, including Cambridge Antibody Technology and Kudos Pharmaceuticals, the number of AstraZeneca attendees at one of Europe’s key partnering conference indicates that these still might not be enough.
It is widely known that AstraZeneca needs to find products quickly. The group’s three biggest selling drugs - Crestor, Nexium and Seroquel - are all facing potential loss of patent protection in the next three years. The three products account for 41% of AstraZeneca’s share price, according the EvaluatePharma’s NPV Analyzer.
There is also very little in the group’s pipeline to take their place. AstraZeneca currently has nine phase III products, which compares unfavourably with industry peers such as GlaxoSmithKline (25) and Novartis (21).
Additionally, the combined net present value of the nine products is only $4.6bn, or 7% of AstraZeneca’s share price, meaning the group could be in for a steep decline in its market value unless it finds new products.
Tim Franklin, pharmaceutical analyst at Dresdner Kleinwort, estimates that AstraZeneca will have to launch 12 products, with peak sales of $1.5bn from 2009, at a rate of four a year to maintain top line growth of 3%.
At present, AstraZeneca has about eight potential candidates that could be meet this deadline, says Mr Franklin, leaving it with a four product short fall, a short-fall that will be difficult to fill in a climate where un-partnered late stage drugs are becoming increasingly rare.
“Trying to acquire four phase II products with $1.5bn peak sales at a reasonable price would be almost impossible,” he says. Mr Franklin said that without new block-buster products AstraZeneca could be facing the grim prospect of eight years of poor growth.
With this possible future hanging over the group, partnering conferences across the globe should be bracing themselves for another invasion by AstraZeneca executives.