AstraZeneca looks set for several agreements to boost its pipeline after suffering a host of late-stage setbacks, according to Dr Martin Mackay (pictured), Head of Research and Development.

The R&D chief indicated the pharmaceutical company is hoping to sign deals with other major pharma companies as well as targeting biotech acquisitions and licensing partnerships.

Speaking to the Financial Times, Dr Mackay said he would be “personally disappointed” if agreements to secure AZ’s future were not completed by the end of the year.

The company has been linked as one of the suitors interested in acquiring Amylin Pharmaceuticals, who reportedly rejected a hostile bid from BMS.

Shareholders at the Anglo-Swedish pharma firm have criticised the leadership of retiring CEO David Brennan for failing to securing merger and acquisition deals to compensate for its failing pipeline.

Mr Brennan announced his departure on the day AZ published their Q1 financial results which revealed an 11% drop in revenue after key brands lost patent protection.

The outgoing CEO said the pharmaceutical industry is “experiencing pressures none of which I’ve witnessed in my 36 years in the industry” but remains “very confident” AZ has the “capabilities, courage and determination to be successful into the future”.

Dr Mackay insists his research teams have remained “undistracted by recent events” at the company and said the department continue to do “the right things”.

Since he joined AZ from Pfizer in 2010, the R&D head has restructured the department, outsourcing several in-house activities whilst axing 40% of its investigational portfolio.

GSK Chief Executive Sir Andrew Witty has ruled out a takeover bid for AstraZeneca.

Sir Andrew told shareholders at the company’s annual general meeting yesterday not to expect any major takeovers in the future as GSK focuses on the potential of its pipeline.

In response to a question over a possible merger, Sir Andrew said a deal for AZ would be “very distracting” at a time when experimental drugs in its pipeline are entering an exciting period.

The future of AstraZeneca remains uncertain as the company battles against generic competition, setbacks in drug development and the loss of its CEO David Brennan after he retires on June 1.

Revenue was down by 8% in the first three months of this year at AZ with sales in the US, Western Europe, Established Rest of the World and Emerging Rest of the World all falling.

David Brennan announced his retirement to coincide with the publication of the Q1 results after admitting that the pharmaceutical sector is “experiencing pressures none of which I’ve witnessed in my 36 years in the industry”.

AZ shareholders had criticised his leadership in recent years after the company had failed to compensate for the loss of revenue with mergers and acquisitions.

As a result, industry analysts have speculated that AZ may become a takeover target for one of pharma’s biggest companies.

A merger of GSK and AZ, the two largest pharma companies in the UK, would provide big cost savings. It led one GSK shareholder to raise the issue with the Chief Executive claiming it would be more effective than the recent $2.6bn offer for Human Genome Sciences.

Sir Andrew said GSK believes it can “deliver an extraordinary return to shareholders through this acquisition. I think we waited until exactly the right moment to make this offer, but nonetheless this is a compelling offer for shareholders at HGS to consider,” he said.

The $13 per share offer was rejected by HGS – who have now instructed Goldman Sachs and Credit Suisse to help explore strategic alternatives to GSK’s bid. Sir Andrew declined to comment on whether he had made contact with HGS’ management since GSK’s offer was rejected.

David Brennan is to retire from his position as Chief Executive Officer and board member of AstraZeneca after more than six years in the role.

Pressure has been growing on the 59-year-old to depart after major shareholders questioned his leadership in the face of generic competition on several leading brands.

Mr Brennan says he is proud of his achievements as CEO and that it has been a “genuine privilege” to lead the company.

He will retire on 1 June 2012 with Executive Director and Chief Financial Officer Simon Lowth acting as interim CEO until a permanent successor has been found.

The departing Mr Brennan admits the pharmaceutical sector is “experiencing pressures none of which I’ve witnessed in my 36 years in the industry”. But he says he remains “very confident” that AZ has the “capabilities, courage and determination to be successful into the future”.

“If we maintain our focus on meeting the needs of patients and trying to solve unmet patient needs, we can continue to deliver attractive and sustained returns for our shareholders,” he said.

Mr Brennan outlined that during his six years as AZ’s leader the company has developed some of the “world’s leading products” and “established a position” in emerging markets. He said AZ had “re-shaped R&D” and “returned considerable value to shareholders”.

He added during his reign that the London-based company had “tried to lead the debate on restoring trust” in the pharma industry through the introduction of a “bold policy on interactions with healthcare professionals”.

His decision to retire was revealed on the same day AZ posted its Q1 results for 2012 – which saw profits fall by 38% and revenue drop by 11% as the company faced generic competition on a number of key products.

AstraZeneca saw revenue fall by 11% in the first quarter of 2012 after generic competition hit the company hard.

Sales amounted to $7.349 billion after several key brands lost exclusivity, which accounted for an 8% decline in revenue. Reported operating profit, profit before tax and earnings per share were also down by more than a third.

David Brennan, Chief Executive Officer, says the “anticipated impact” of generic competition “has made for a difficult start to the year”.

Revenues were down in the US (12%), Western Europe (21%) and in Established Rest of the World (6%) and Emerging Rest of the World (1%); however, emerging markets did see a 1% increase.

In the US, revenue was down from $3.3bn in Q1 2011 to $2.9bn in the same period this year. Generic competition on Seroquel IR accounted for $223 million of the $384m loss. Growth was recorded for Onglyza, Seroquel XR and Symbicort. However, this was offset by a decline in sales of Nexium and a loss of protection for Toprol-XL, Arimidex and Merrem.

Sales were down further in Western Europe where generic competition for Nexium, Arimidex and Merrem accounted for nearly 60% of lost revenue. In Japan sales were down by a tenth, and in Canada by 8%.

An increase in revenue in China by 13% helped sales increase in emerging markets as AZ again faced the loss of patent protection for Crestor and Seroquel in Brazil and government interventions in price in Turkey.

AZ also lost $702 million in restructuring costs in Q1 as it undertook the third phase of the $2.1bn efficiency programme it revealed in February 2012. It anticipates that total restructuring costs will be absorbed this year in order to save $1.6bn by the end of 2014.

The disappointing results were published on the same day that David Brennan revealed plans to retire from his position on 1 June 2012.

Ana Nicholls, Analyst, Economist Intelligence Unit, says his decision to stand down is no real surprise. “Investors have long been dissatisfied with AstraZeneca’s efforts to cope with these challenges, despite its efforts to keep them onside,” she commented.

“Managers are aware they also need to step up their expansion into emerging markets that hold better growth prospects. Given this, and AstraZeneca’s fairly health cash pile, the company is under pressure to make acquisitions to help sustain growth – it is Mr Brennan’s failure to do this that has forced him into retirement.”

As a result of the Q1 figures, AstraZeneca readjusted its 2012 outlook and expects the decline in revenue will be in the range of the low to mid-teens.

AstraZeneca CEO David Brennan has played down speculation over his future at the company.

Major shareholders recently questioned whether Mr Brennan was the right man to lead the company out of its current pipeline problems.

However, the CEO says he is “plugged in” to the current issues the company faces and insists his role “hasn’t changed a bit” after the criticism of his leadership.

AZ is set to be one of the biggest losers during the ‘patent cliff’. Its major brands Seroquel and Atacand lose protection this year, Nexium is set to go off patent in 2014/15 and Crestor in 2016.

Its huge £15.6 billion takeover of MedImmune in 2007 was hoped to ease the pressure of generic competition but has failed to meet expectations and led one shareholder to say the deal has “tarnished” the CEO’s reputation.

But Mr Brennan, who has been the CEO for the past six years, insists he is the right man to lead the company. He commented: “I read and hear and see lots of things, but we’re here trying to change policy, make good decisions and execute our strategy.

“If it’s about restructuring, we can do that without a big deal. Maybe somebody sees something different, but spending more money does not have a linear increase in the number of returns you get from a research and development perspective.”

It’s widely expected that the 58-year-old will vacate his role around the time of his 60^th birthday. But an AZ spokesperson said that Mr Brennan is still “fully committed to leading AstraZeneca”.

Investors at AstraZeneca have called for the pharmaceutical company’s board and executive team to be changed and a new business strategy introduced.

AZ has been trading on the lowest price/earning multiple across the sector, which has led to several major investors in the company calling for Chief Executive David Brennan (pictured) to be replaced.

Speaking to the Financial Times, one investor said Mr Brennan is “under intense pressure”.

The company’s board of directors already looks set to change with Leif Johansson seeking formal election as chairman at AZ’s AGM later this month.

Some of the company’s top 20 investors have suggested replacing David Brennan with current Finance Director, Simon Lowth.

Whilst some have questioned Mr Lowth’s experience, Tony Zook, Global Commercial Vice President, has also been suggested as a replacement for Mr Brennan – who is expected to vacate his position when he turns 60 next year.

But Jack Scannell, analyst at Bernstein Research, said AZ should avoid a “lawyer or a marketing person” taking over. “You either need Attila the Hun – a total butcher – to run it down until it can be bought, or a Paul Janssen-like figure: a successful scientist who can really take on the research team,” he said.

The analyst revealed that Bernstein Research expects AstraZeneca to complete a mid-sized acquisition after a note on the matter said “the status quo is not sustainable” and that “desperate times may lead to outwardly appearing desperate actions.”

However, another shareholder told the FT that any new acquisitions were “unthinkable” at present until the company’s senior management team had been reshuffled to develop a new credible strategy for the group.

AstraZeneca will collaborate with Amgen to develop and commercialise five products from the US biotech company’s portfolio of antibodies to fight inflammation.

The five monoclonal antibodies offer potential treatments for psoriasis, psoriatic arthritis, asthma, Crohn’s disease, ulcerative colitis and lupus.

Under the terms of the agreement, the UK pharma company will make a one-off $50m upfront payment and then the companies will share costs and profits.

The collaboration will increase Amgen’s resources for drug development, drawing on the expertise of AZ’s biologics business MedImmune as well as its global commercial reach.

The companies will jointly develop and commercialise the following five assets from Amgen’s clinical-stage portfolio:

• Brodalumab (AMG 827), currently being investigated for psoriasis (planned phase III), psoriatic arthritis (phase II) and asthma (phase II).

• AMG 139, being investigated for Crohn’s disease (phase Ib).

• AMG 181, being investigated for ulcerative colitis (phase Ia) and Crohn’s disease ((phase Ib).

• AMG 557, being investigated for autoimmune diseases such as lupus (phase Ib).

• AMG 157, being investigated for asthma (phase Ib).

The agreement does not include certain territories covered by Amgen’s existing agreements with Kyowa Hakko Kirin for brodalumab and Takeda for AMG 557.

AZ will fund approximately 65% of costs for these products to the end of 2014, and then the companies will split costs equally. Amgen will book global sales and retain a single-digit royalty for the portfolio, after which they will share profits equally.

Amgen will lead the development and commercial strategy for brodalumab and AMG 557, while AZ will do the same for AMG 139, AMG 157 and AMG 181.

David Brennan, CEO of AstraZeneca, said: “This creative collaboration will make the most of both companies’ respective capabilities, including AstraZeneca’s extensive global reach, to help bring these potentially innovative treatment options for a variety of respiratory and inflammatory diseases to patients around the world.”

“We believe this collaboration has the potential to bring more therapies to patients sooner, across more geographic areas,” commented Kevin Sharer, CEO of Amgen. “We are impressed with AstraZeneca’s extensive experience in developing and launching products in the respiratory and gastroenterology areas, and believe this collaboration is an opportunity to work with a partner that has leading regulatory and commercial expertise in inflammation indications.”

David Brennan (pictured), Chief Executive of AstraZeneca, saw his remuneration increase by £3.73 million in 2011, despite a drop in sales and core operating profit and gross margin flat-lining last year.

Mr Brennan’s basic salary increased by 2.5% to £997,000 last year in line with pay increases across the company. But his bonuses and performance-related shares saw his total package soar to £9.27m.

John Varley, Chair of AZ’s Remuneration Committee and a non-executive director, insisted the company does “not award increases that are not justified by individual performance”.

The total remuneration package includes a one-off £5.9m bonus from a three-year plan which was paid on the basis of a sharp increase in the company’s share price since 2008.

However, the Remuneration Committee judged that Mr Brennan and Simon Lowth, Chief Financial Officer, should have a cash bonus 16% less than in 2010, after the decline in sales and operating profits.

But the Committee did advise that Mr Brennan’s shareholding should increase from a minimum of 200% to 300% of his base salary.

Mr Brennan has now waived an increase in his basic salary for 2012 – something he did in 2010.

AstraZeneca’s 2011 Annual Report revealed sales dropped 2% at CER to $33.6bn in 2011 and core operating profit down 4% at CER to $13,167 million as a result of sales decreasing in the US (–2%) and in Western Europe (–11%).

AZ’s decision to increase their CEO’s remuneration follows similar moves by Pfizer and GSK. Abbott, however, decided to reduce its leaders’ pay by around a quarter.

Pharmaceutical companies must provide appropriate training to all employees to ensure interactions with stakeholders are ethical, according to new revisions to the industry’s international code of practice.

The International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) has updated its guiding principles to ensure interactions are conducted to high ethical and professional standards at all times.

David Brennan, IFPMA President and AstraZeneca CEO, says the revised regulations provide a framework for the industry to “act with integrity and build trust”.

The emphasis placed on training by the Federation follows qualitative research (read here) by Pharmaceutical Field which found UK pharma companies are not doing enough to develop new skills needed by sales representatives to excel in the modern working environment.

The updates to the 2012 Code aim to increase transparency and increase patients’ welfare and health.

The Code says that any ‘events’ for healthcare professionals should only be organised to provide scientific or educational information, or to inform individuals about products.

Also, no company may arrange events for stakeholders that take place outside of their home country, the Code says, unless it is justified from a logistical or security point of view.

When interacting with patient organisations, pharma companies must act ethically and respect the independence of the group. They should also declare involvement from the outset with patient groups and provide written evidence. Finally, patient group meetings or events may be sponsored by companies, but only if the purpose of the meeting is “professional, educational and scientific in nature”, the Code adds.

Additional amendments to the Code include high-level guiding principles for practice and a clear distinction between gifts, promotional aids and items of medical utility. Guidance for supporting continuing medical education, a provision of disclosure of clinical trials information and guidance for filing complaints has also been updated.

Pre-approval promotional activities for pharmaceutical products, company-sponsored entertainment at events and personal gifts to healthcare professionals remain prohibited in an attempt to increase transparency.

David Brennan commented that the new amendments were “not about doing the easy thing, but the right thing”.

The amendments have been backed by the International Alliance of Patients’ Organizations (IAPO). Durhane Wong-Rieger, Chair, IAPO, commented: “The expansion of this Code of Practice is welcome and necessary to bring greater clarity to the ethical standards that should be adhered to.

“The public must have trust and confidence in all healthcare decision-making and IAPO welcomes IFPMA’s commitment to promote appropriate standards and will observe closely how well these are implemented and followed globally.”

The Federation, which represents the research-based pharmaceutical industry, requires all member companies and associations around the world to adopt and implement new aspects of the Code.

AstraZeneca saw revenue fall by around $3bn in 2011 after it faced global pricing restrictions from governments and generic competition.

Revenue was down 2% in constant exchange rates (CER) to $33.5bn after sales in the US fell by 2% and in Western Europe by 11%.

Despite the fall in revenue, David Brennan, AZ CEO, says the company’s “disciplined execution” of its strategy “delivered good performance” last year.

The company now expects to see reduced revenue in 2012 after the anticipated loss of exclusivity for Seroquel IR and Atacand in global markets, as well as for Crestor in Canada.

Sales in the US were down from $13.7bn in 2010 to $13.4bn last year after US healthcare reforms lowered income. This was despite growth in Crestor (+16%), the Seroquel franchise (+10%), Symbicort (17%) and Onglyza in the country.

In Western Europe, nearly a billion dollars was lost due to generic competition on Nexium, Armidex and Merrem. But losses were compensated by growth by Seroquel XR, Iressa, Faslodex, Crestor and Onglyza.

Emerging markets did show promise for the company as growth increased by 10% both in Q4 and for the full year. This was driven by mid-to-high teen growth in China, Russia and the Middle East/North Africa region. But generic erosion on Crestor and Seroquel IR in Brazil did see revenue fall in the country.

Sales of AZ’s gastrointestinal medicines were down 11% to $5.5bn with revenue also down on its oncology products by 12% to $3.7bn. But cardiovascular treatments, led by $6.6bn sales of Crestor, and its neuroscience drugs, helped by $5.8bn sales of the Seroquel brand, both recorded growth of 5% last year.

“While the further expected losses of market exclusivity make for a challenging 2012 outlook, we remain committed to a long-term, focused, R&D based strategy, and today we have announced further steps to drive productivity in all areas to improve returns on our investment in innovation,” said David Brennan.

In conjunction with its 2011 results, AstraZeneca also revealed new restructuring plans to its sales, general and administrative, research and development and operations divisions which will see 7,300 positions removed from its workforce by 2014. The move, which is hoped will generate annual savings of $1.6bn, is expected to cost the company an outlay of $2.1bn. Read the full job cuts story here.