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AstraZeneca sees R&D restructuring to result in $1.4B in charges

AstraZeneca earlier announced plans to invest in strategic research and development centers in the U.K., the U.S. and Sweden to improve pipeline productivity and to establish the company as a global leader in biopharmaceutical innovation. Under the plans, AstraZeneca’s small molecule and biologics R&D activities will be concentrated in three strategic centers: Cambridge, U.K.; Gaithersburg, U.S.; and Mölndal, Sweden. The proposals are expected to be fully implemented by 2016. The consolidation of AstraZeneca’s global R&D footprint and the creation of a new headquarters will impact on other sites over the next three years, particularly in the U.K. and U.S. In a filing associated with the press release, the company estimated globally, over the 2013-2016 period, the proposed investment and associated changes announced will lead to the relocation of nearly 2,500 roles and an overall estimated reduction in headcount in the region of 1,600 roles. The program is expected to incur $1.4B in one-time restructuring charges, of which $800M are likely to be cash costs. In addition, the company will invest approximately $500M in establishing the new center in Cambridge. Annualized benefits of approximately $190M are expected by 2016 for the program, AstraZeneca said.