Roche and Astrazeneca Shake Up R&D Operations

Roche and Astrazeneca Shake Up R&D Operations

January 15th, 2013 // 4:25 pm @

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The meager pipelines and R&D setbacks plaguing the pharmaceutical industry have prompted two of the largest drugmakers to shake up their operations today. Roche hired John Reed (pictured left), who heads the Sanford-Burnham Medical Research Institute in California, to take over as head of its Pharma Research and Early Development unit, replacing Mike Burgess. And AstraZeneca announced that R&D head Martin Mackay is leaving.

In fact, the moves at AstraZeneca are more widespread than just R&D as Tony Zook, who had been executive vp for global commercial activities, is also leaving. As part of the shake up, AstraZeneca is also creating several new R&D and commercial positions, including a new executive job that will be responsible for global portfolio and product strategy, in hopes of “bridging” R&D and sales.

The moves reflect the frustration that many large drugmakers have encountered in recent years as they muddle through the patent cliff – the moment when big-selling meds lost patent protection and face generic rivals; laboratory setbacks; regulatory hurdles and an increasingly competitive scramble to acquire or license compounds or simply purchase smaller companies.

Roche, for instance, last spring abandoned development of a pill that was being tested for raising HDL, or good, cholesterol after the compound failed to deliver meaningful clinical efficacy (back story). The disappointment prompted a decision to close a New Jersey facility and cut 1,000 US R&D positions (read this).

Whether Reed is the needed elixir for it woes remains to be seen. The 54-year-old is a leading researcher who has focused on cancer, neuroprotection and autoimmunity, among other afflictions, and has served on boards for various biotechs and drugmakers, but he has not worked in a large corporation or run an R&D unit of the sort that he will now oversee (read his resume here and here is the Roche statement).

Nonetheless, one analyst viewed the change at Roche as welcome. “Appointing a new head of (pharma research and early development) from the outside is viewed as an excellent move in order to reposition this organizational unit within Roche,” Kepler Capital Markets analyst Martin Voegtli tells Reuters. “Historical R&D productivity (at the unit) has been poor and we expect dynamics to pick up.”

As for AstraZeneca, former Roche exec Pascal Soriot has made his biggest move since joining the drugmaker as ceo last summer. But AstraZeneca has needed some big changes. Under his predecessor, Dave Brennan, AstraZeneca languished and was relying on a variety of licensing deals, partnerships and acquisitions to replenish its pipeline. There was also the failure of the $15 billion acquisition of MedImmune six years ago to yield any results.

And so, Soriot is trying to not only bolster R&D, but create a structure in which discovery and development is more closely aligned with commercial possibilities, a concept that is regularly discussed in the pharmaceutical industry, but imperfectly executed. His plan calls for creating three senior R&D roles responsible for discovery and early stage development in small molecules; discovery and early stage development in biologics; and late stage development. There will also be three new commercial jobs representing North America, Europe and International.

“This new senior executive team structure, that draws heavily from the leadership talent within the company, enables us to bring an even sharper management focus to key pipeline assets, key brands and key markets, and helps us further accelerate decision-making,” Soriot says in a brief statement.

Mackay, for those who recall, joined AstraZeneca in May 2010 (see this) and had previously headed worldwide research and technology at Pfizer when the drugmaker suffered an embarrassing flop – its much-hyped torcetrapib cholesterol pill failed during a Phase III trial.


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