Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Amarin Corporation plc (ADR) (AMRN): AstraZeneca plc (ADR) (AZN) is Headed in the Right Direction

In my last report on AstraZeneca plc (ADR) (NYSE:AZN), I focused on the patent expiry of Seroquel IR and the resultant decline in company sales. According to recent news, the troubles of AstraZeneca are still not over and the company is cutting approximately 2,300 sales and admin jobs. This is part of a large plan put forward by the new CEO to jump start falling sales.

AstraZeneca plc (ADR) (NYSE:AZN)Strategy shift

The new CEO, Pascal Soriot, is overhauling the strategic direction of the company. AstraZeneca will reduce its focus on neuroscience and anti-infectives, including antibiotics by reducing research and development expenditure in these fields. The company will instead limit its focus on three key therapy areas of cardiovascular, cancer, and metabolism disorders. Late last year, Soriot also cut the share buyback program of AstraZeneca plc (ADR) (NYSE:AZN) to focus funds on R&D.

The company has streamlined its Research and Development, which can be a long-term catalyst for the stock. According to company disclosures, all the R&D at AstraZeneca will be consolidated into three centers of excellence to achieve the following targets:

Improved collaboration

Reduced complexity

Accelerated decision-making and, ultimately, improved R&D output

This overhaul has already resulted in the loss of 1,600 jobs and will put more strain on its cash position. According to company disclosures, this would amount to a onetime expense of $2.3 billion in terms of restructuring charges, but would benefit the company in the long run. The management is expecting the program to result in annual savings of $800 million by 2016.


The pipeline of AstraZeneca plc (ADR) (NYSE:AZN) holds the key to future of the company. The company has already lost its leading drug candidate, Seroquel IR, and more patents are on their way out. AstraZeneca’s top selling drug Nexium, which treats stomach acid, will lose its patent protection in 2014. According to Reuters, the cholesterol pill Crestor will also lose its U.S. patent protection in 2016.

The company has an elaborate pipeline, a detailed list can be found here. However, according to sell side, only 11 to 12 assets will readout in 2013/2014. The commercialization is still a pretty long way away from candidates which enter Phase III trials. If successful, these candidates will be able to reach the market by 2017.

AstraZeneca’s strongest candidates are in oncology and respiratory segments. Olaparib and Selumetinib are the leading oncology candidates. According to company disclosures, these drugs have a sales potential of less than a billion dollars.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.