LONDON (Dow Jones)--AstraZeneca PLC (AZN) said Thursday its need to
cut costs had driven the difficult decision to carry out further
restructuring -- a move which will see the drug maker reduce its
financial exposure to research into disorders of the brain.
"While the patient need for better medicines in neuroscience is huge and the science is promising, advances in treatments have proved elusive for the pharmaceutical industry in recent years, despite significant investment," the company said, adding: "AstraZeneca believes that it will have the best chance of success in future by combining the company's internal expertise with innovative external science."
The move, part of the company's latest restructuring to rein in costs and shrink operations, is aimed at making "a simpler and more innovative R&D organization with a lower and more flexible cost base. Excess capacity in certain R&D functions will be reduced, matching resources to AstraZeneca's more focused R&D portfolio."
As a result, AstraZeneca will create a new "virtual" neuroscience Innovative Medicines unit made up of a small team of around 40 to 50 AstraZeneca scientists conducting discovery and development externally, through a network of some of the most innovative partners in academia and industry globally.
The team will be based in major neuroscience hubs - Boston, Massachusetts and Cambridge, England - and work closely with innovative partners such as the Karolinska Institute in Stockholm, Sweden.
Drug companies have always had difficulty making money from neuroscience, because researching the brain is a riskier enterprise, with lower successful hit rates and higher risks of failure than some other therapeutic areas.
AstraZeneca's head of R&D Martin Mackay said: "We've made an active choice to stay in neuroscience though we will work very differently to share cost, risk and reward with partners in this especially challenging but important field of medical research. The creation of a virtual neuroscience iMed will make us more agile scientifically and financially - we will be able to collaborate flexibly with the best scientific expertise, wherever it exists in the world."
Implementation of the plan will lead to a significant reduction in employee numbers and the end of R&D activity at two sites that are focused on neuroscience: Soedertaelje in Sweden and Montreal in Canada.
As the location of the company's largest manufacturing site, and the base of the commercial business covering the Scandinavian markets, Soedertälje remains an important part of the AstraZeneca network. The company's Montreal facility will close.
AstraZeneca said the latest restructuring in R&D will lead to the loss of around 2,200 positions globally.
The U.K.'s second-biggest drug maker said its latest phase of cost cutting would see the loss of around 7,300 jobs throughout the company and deliver a further $1.6 billion in annual savings by the end of 2014.
At 0935 GMT, AstraZeneca shares were down 3.4% or 105.5 pence at 2984p in a broadly lower London market.
"While the patient need for better medicines in neuroscience is huge and the science is promising, advances in treatments have proved elusive for the pharmaceutical industry in recent years, despite significant investment," the company said, adding: "AstraZeneca believes that it will have the best chance of success in future by combining the company's internal expertise with innovative external science."
The move, part of the company's latest restructuring to rein in costs and shrink operations, is aimed at making "a simpler and more innovative R&D organization with a lower and more flexible cost base. Excess capacity in certain R&D functions will be reduced, matching resources to AstraZeneca's more focused R&D portfolio."
As a result, AstraZeneca will create a new "virtual" neuroscience Innovative Medicines unit made up of a small team of around 40 to 50 AstraZeneca scientists conducting discovery and development externally, through a network of some of the most innovative partners in academia and industry globally.
The team will be based in major neuroscience hubs - Boston, Massachusetts and Cambridge, England - and work closely with innovative partners such as the Karolinska Institute in Stockholm, Sweden.
Drug companies have always had difficulty making money from neuroscience, because researching the brain is a riskier enterprise, with lower successful hit rates and higher risks of failure than some other therapeutic areas.
AstraZeneca's head of R&D Martin Mackay said: "We've made an active choice to stay in neuroscience though we will work very differently to share cost, risk and reward with partners in this especially challenging but important field of medical research. The creation of a virtual neuroscience iMed will make us more agile scientifically and financially - we will be able to collaborate flexibly with the best scientific expertise, wherever it exists in the world."
Implementation of the plan will lead to a significant reduction in employee numbers and the end of R&D activity at two sites that are focused on neuroscience: Soedertaelje in Sweden and Montreal in Canada.
As the location of the company's largest manufacturing site, and the base of the commercial business covering the Scandinavian markets, Soedertälje remains an important part of the AstraZeneca network. The company's Montreal facility will close.
AstraZeneca said the latest restructuring in R&D will lead to the loss of around 2,200 positions globally.
The U.K.'s second-biggest drug maker said its latest phase of cost cutting would see the loss of around 7,300 jobs throughout the company and deliver a further $1.6 billion in annual savings by the end of 2014.
At 0935 GMT, AstraZeneca shares were down 3.4% or 105.5 pence at 2984p in a broadly lower London market.
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