AstraZeneca will take a £245m pre-tax charge in the fourth quarter following a double blow to its new drug pipeline, the pharmaceuticals company said yester-day.
Cancer drug olaparib will not progress into final Phase III testing for ovarian cancer due to disappointing results in a mid-stage clinical trial, while the experimental antidepressant TC-5214 failed to meet its goal in a second Phase III study.
AstraZeneca is developing TC-5214 with US biotech partner Targacept.
The double dose of bad news will further undermine confidence in AstraZeneca’s ability to renew its business in the face of declining sales of existing medicines.
Its shares already trade at a discount to the European sector, reflecting investor concerns about a limited pipeline of new drugs to offset looming patent losses on blockbusters like Seroquel for schizophrenia and Nexium for heartburn and ulcers.
Despite the R&D (research and development) impairment charges, AstraZeneca still expects to hit its target for 2011 earnings.