AstraZeneca gives up on pipeline drug

PHARMA giant AstraZeneca is ending development of a rheumatoid arthritis pill that was one of its few late-stage experimental medicines, following disappointing results.

The decision is a fresh blow to AstraZeneca’s already sparse new-drug pipeline and a bigger setback for Rigel Pharmaceuticals, the US biotech firm that struck a licensing deal for fostamatinib with Britain’s second-biggest drugmaker in 2010.

For AstraZeneca, the move will result in a $140m (£91.5m) impairment charge relating to intangible assets, to be taken in the second quarter, although this will not affect its financial guidance for 2013, which is based on so-called core earnings.

Scrapping fostamatinib is not a complete surprise. However, Briggs Morrison, AstraZeneca’s global head of medicines development, said the results of late-stage trials did not measure up to the promising results seen earlier in development.

“We remain committed to the search for new treatments for patients with rheumatic and inflammatory diseases with Phase II compounds in rheumatoid arthritis and lupus and Phase III compounds in gout and psoriasis.”

The move highlights the hazards facing chief executive Pascal Soriot as he bets on new drugs that he hopes can replace revenues from older products that are coming out of patents.

“The news ... reminds investors that the stock carries significant pipeline execution risk,” said Panmure Gordon analyst Savvas Neophytou.