AstraZeneca (AZN) recently entered into a research collaboration with a Russia-based institute, N.N. Petrov institute of oncology for identification of genetic mutations in patients suffering from cancer.
As per the terms of the agreement, teams from AstraZeneca’s oncology innovative medicines group will work with scientists from Petrov Institute at various centers across the globe.
We are positive on Astrazeneca’s deal with the Russian institute. It reflects the company’s efforts to boost/develop its pipeline. We believe that AstraZeneca’s pipeline must deliver since many of its drugs are facing/likely to face generic competition
Generic competition has adversely impacted AstraZeneca’s revenues over the past few quarters. 2013 is expected to be a challenging year for AstraZeneca. The company expects mid-to-high single-digit decline in revenues in 2013 primarily due to generic erosion of Seroquel IR and Crestor (in Canada) revenues.
This has put significant pressure on the company. Additionally, there is increasing uncertainty regarding the company’s key drug Crestor (cholesterol management) due to the entry of generic versions of a competitor drug. The company’s much hyped antiplatelet, Brilinta’s performance has remained lukewarm.
AstraZeneca is looking to combat the generic threat through deals and acquisitions. The Ardelyx and Isis Pharma agreements, Ardea acquisition, the collaboration with Amgen (AMGN) and the expansion of the diabetes alliance with Bristol-Myers Squibb Company (BMY) represent efforts in that direction.
AstraZeneca carries a Zacks Rank #3 (Hold). However, other large cap pharma stocks such as Bayer (BAYRY) currently look more attractive with a Zacks Rank #2 (Buy).
More From Zacks.com