The first thing that will happen will be the elimination of another 700 jobs. In the recent past they have shed a lot of unnecessary workers. 1200 jobs were lost in Wilmington DE back in March. A few days after this announcement the total amount of jobs to be eliminated by 2016 was reported to be 5,050. One has to wonder what so many people were doing that no longer needs to be done. Those who survived the cuts will be moved around like chess pieces. From Fiercetech:
Soriot is moving R&D workers from the company's big facility in Alderley Park to Cambridge so they can get closer to the cutting-edge scientific work being done in the hub. And Soriot has been moving other pieces on the global R&D chess board as well, concentrating efforts at Medimmune in Maryland and in Sweden as well.
No matter where you go, there you are. What has really changed? The proximity to "cutting edge scientific work" has always seemed unnecessary. If an HPLC can quantitate the amount of a protein in a cell supernatant in the U.S., it can do the same thing in China. What matters most is the technology transfer skills of the workers, not their location. With computer technologies in fact, methods can be e-mailed, loaded into the HPLC and ran immediately. The only issue is the physical transportation of the material to be tested.
But that is only a small example. Perhaps the cutting edge technology they speak still requires leading researchers to be in close proximity of one another. I'm having a hard time remembering who set the precedence for this but perhaps this will work. We can however take a look at another aspect of the AZ plan that may not pan out, based on the news of this past week. Part of the new plan will involve acquisitions such as the purchase of Pearl Therapeutics ($1.5 billion) for their COPD pipeline and Omthera's omega-3 cardio program for $443 million. Acquisitions are a gamble. Acquiring rights to other peoples candidates in not far from giving the green light to your own ideas. Most often they all come from basic research that someone else started. Fostomatinib, a tyrosine kinase inhibitor, recently failed in clinical trials to help RA patients. Today AZ announced the end of the line for their type II diabetes candidate Onglyza.
Part of the reinvention of AZ is to focus acquisitions on certain areas, cardiovascular and metabolic medicine, oncology, and respiratory and inflammatory drugs. Already we see this plan failing. Perhaps the people working on the project were located in the wrong part of the world.
"We will have people based here (Cambridge) potentially at the end of the year and we will start benefiting from the location," Soriot said.
"You've got to look at this over a horizon of three to four years, it is not a six-month horizon," Soriot said in a telephone interview from Cambridge. "And it is not going to be a smooth journey. We will have ups and downs."
Not five years? Three to four years specifically? Which drugs will get approved during this time? If it takes up to ten years or more to get a drug approved one would have to assume that the drugs that will turn AZ around in the next three to four years began their lives in a different location. Along with the people starting to benefit from the fresh Cambridge air, they had better get these drug projects moved?
It's Cargo Cult business as usual. Layoff a whole lot of people. Close down sites, restructure the hierarchy, focus on the usual high profit disease areas, and promise to get things turned around in a few years. "We will have our ups and downs." Lest you thought it was all downhill from here. Of course we think of it as a large Cargo Cult Airport. Rearranging the people, the location, the projects are old ideas offered up by the same guys. The new AZ CEO, Soriot, came from Roche. But he is new to AZ. The R&D and corporate HQ are new. The old pieces have been rearranged to appear new. What has really been done scientifically to bring about change? The cults have been looking to the skies for cargo since the Allied forces packed up and went home. Something is still missing.