Astra pays for failure to land new blockbusters

Drugs giant AstraZeneca yesterday warned that profits would be at the lower end of its expectations after suffering setbacks in its efforts to produce new blockbuster treatments.

The UK’s second-biggest medicine maker said an ovarian cancer drug called olaparib will not progress for further development after tests revealed it was unlikely to prove effective.

And the results of tests on drugs for major depressive disorders were disappointing although research is still ongoing.

As a result, the group said it will take impairment charges of $381.5 million (£246m) in the final quarter of 2011, which mean that its earnings were likely to be in the lower half of its range of forecasts.

Shares dipped 1.5 per cent amid fears that Astra, which employs some 11,000 staff around the UK, has relatively few drugs to replace its existing stable such as Nexium for heartburn and schizophrenia drug Seroquel.

The industry is facing a challenging period as it looks for new products and faces the loss of exclusivity on existing drugs.

Astra has in recent years been hampered by problems with its newest medicines after it discontinued its motavizumab drug, used to prevent serious lung disease, leading to a $445m accounting charge. It also suffered delays in winning approval from US regulators for its heart medicine Brilinta.