AstraZeneca double blow as major drugs fail trials

AstraZeneca was today suffering from a $380 million (£243 million) headache after two of its major new drugs failed to hit targets in late-stage clinical trials, damaging expectations for its annual earnings.

Britain's second-biggest pharmaceuticals firm said that it will not submit its ovarian cancer drug olaparib for Phase III trials because it did not sufficiently boost patient survival rates.
That triggered a writedown of $285 million that Astra had spent on research and development.
Meanwhile, its experimental antidepressant drug, named TC-5214 failed to fulfil its aims in another trial, leaving Astra taking a charge of $96.5 million.

The pharmaceuticals giant said it is still reviewing plans for the antidepressant, but is now banking on a "lower probability of success". As a result, earnings for 2011 will come in at the bottom end of its previous range of $7.20 to $7.40 per share, Astra said.

It is another blow for the company, which is facing a drastic "patent cliff" as blockbuster drugs such as Seroquel for schizophrenia and Nexium for heartburn and ulcers start to face generic competition. It also needs new medicines to replace the revenue it is already losing after patents expired on old treatments. These include cancer drug Arimidex, which brought in revenues of
$1.5 billion in 2010 before facing generic competition last year. Shares in AstraZeneca lost 78.5p to 2870.5p.

Navid Malik at Merchant Securities said: "AstraZeneca has confirmed our belief that it is facing significant hurdles in its ongoing efforts to deliver new products from its pipeline."