AstraZeneca chief hints at changes with adverse outlook as patents expire

AstraZeneca chief executive Pascal Soriot, who took the reins at the company on 1 October has already made top-level management changes and his early observations suggest more changes may be in the offing in the drugmaker's operations.

In a conference call with reporters yesterday, Soriot said the company had become a little bit complicated as it released 2012 fourth-quarter and full-year financial results.

With a view to speed up development of diabetes drugs through AstraZeneca's partnership with Bristol-Myers Squibb, the two companies formed what is called the AZ-BMS Diabetes Alliance Team that would operate from an as yet undetermined location near Philadelphia.

AstraZeneca needs the help because yesterday's figures showed falling revenue and profit for 2012, with the company expecting the trend to continue in 2013. The full-year revenue fell from $33.59 billion in 2011 to $27.97 billion in 2012, with net profit declining from $10.02 billion to $6.30 billion in the same period.

When patents expire on brand-name drugs, patients often switch to cheaper generic versions.

Patents for four AstraZeneca drugs - Seroquel IR (antipsychotic), Atacand (cardiovascular), Nexium (heartburn), and Merrem (antibiotic) which accounted for 85 per cent of the revenue decline are set to expire. Two versions of Seroquel that lost patent protection in March netted a combined $3 billion less in 2012 than 2011.