Facing looming patent cliffs, AstraZeneca has launched a restructuring initiative aimed at generating $1.5 billion in annual savings by 2029.
Savings from the “Reshaping for Sustainable Growth” program will be reinvested “principally in the pipeline,” AZ said Friday in its third-quarter earnings announcement.
The company expects the three-year initiative to incur up to $2 billion in one-time restructuring costs.
The overhaul follows similar cost-cutting initiatives launched by Big Pharma peers, including Pfizer, Bristol Myers Squibb, Merck & Co., Novo Nordisk and GSK, in recent years.
AZ is refocusing its resources on pipeline growth following reports that a potential merger with BMS had fallen through. The reported combination, which would have created one of the world's largest pharmaceutical companies, faced investor pushback and raised questions about AZ's long-term growth outlook.
Following the merger speculation, AZ CEO Pascal Soriot told Bloomberg that the British pharma does not need a major acquisition to sustain growth beyond 2030.
During a press conference Friday, Soriot reaffirmed AZ's ambition to reach $80 billion in annual sales by 2030.
“We believe we have the science, the pipeline and the team to deliver,” he said.
While AZ is positioned to grow beyond 2030 without a major acquisition, Soriot said the company continues to look for opportunities to strengthen its portfolio.
“We are constantly looking at, how do we strengthen our presence in a franchise or another, in a disease or another, and how do we add more value to our portfolio in a company?” he said.
The restructuring is not expected to result in a net reduction in AZ's workforce, Chief Financial Officer Aradhana Sarin told reporters during the call. Although some positions will be eliminated, the company expects to create new roles as it reallocates resources.
“It won’t lead to a net reduction in jobs,” Sarin said. “We are a growing company. We still have big ambitions. I’d say net-net, we’ll still be adding jobs, maybe different types of jobs or jobs in different areas.”
“You don’t spend $1.5 billion without creating jobs,” Soriot said. “So right there, you see that there will be changes. It’s more reallocation of resources across the pipeline and across the world. In the end, we are still a growing company, and the idea is not to shrink the company. The opposite, actually.”
The executives did not specify which job functions would be affected, but Soriot said the restructuring would involve reallocating roles and resources across geographic regions and business functions.
Thanks to years of growth under Soriot's leadership, AZ was one of only three large pharmaceutical companies to consistently expand its workforce since 2021, a recent Fierce Pharma report shows. The company's last major restructuring initiative dates back to a separate $1.5 billion cost-cutting program launched in 2016, when its top-selling drug, Crestor, lost patent protection.
The latest restructuring comes as AZ, like its Big Pharma peers, faces several near- and mid-term patent cliffs. Its blockbuster SGLT2 inhibitor Farxiga is already competing with generics in the U.S. and China, with global third-quarter sales falling 25% year over year to approximately $1.6 billion.
Its antiplatelet drug Brilinta, PARP inhibitor Lynparza and respiratory medicine Symbicort have lost market exclusivity in certain markets. Meanwhile, the company faces additional patent expirations in the early 2030s for major oncology products, including the BTK inhibitor Calquence, EGFR-targeted lung cancer drug Tagrisso and PD-L1 inhibitor Imfinzi.
Against that backdrop, Soriot highlighted 23 key clinical readouts expected in 2027 that collectively represent more than $20 billion in potential peak annual sales. These include multiple phase 3 readouts for Daiichi Sankyo-partnered antibody-drug conjugate Datroway and the oral selective estrogen receptor degrader Etcamah in adjuvant breast cancer.
The two medicines are among 12 programs that Soriot said have non-risk-adjusted peak sales potential exceeding $5 billion.
On the dealmaking front, AZ recently completed a $2 billion equity investment in Summit Therapeutics as part of a broader collaboration focused on combining AZ's antibody-drug conjugates with Summit's Akeso-partnered PD-1/VEGF bispecific antibody ivonescimab.
“The logic behind this partnership is maximizing the value of our ADC platform,” Soriot said. “And of course, the logic for Summit is to maximize the value of ivonescimab by combining it with ADC. That will be an important part of cancer care in the future.”
The Summit investment is one of several China-related deals struck by AZ, but potential regulatory changes in China and the U.S. could complicate future cross-border transactions.
China is proposing new rules that would block foreign acquisitions of certain advanced biotechnologies involving cell and gene therapies and small interfering RNA, or siRNA. Meanwhile, the U.S. Treasury Department has proposed expanding restrictions under the COINS Act to include certain pharmaceutical investments in China, which could prohibit some U.S. outbound investments in the country's biotech sector.
Soriot said AZ is closely monitoring the proposed regulatory changes and would comply with any new rules that take effect.
“But it’s important to remember that in science, collaboration is important, and in cancer or other diseases, people will want access to medicines that can save their lives,” he said.
If AZ licenses a product from China and commercializes and manufactures it in the U.S., Soriot said, the drug “becomes a U.S. product, saving U.S. lives.”