New CEO to announce outcome of new restructuring plan in Jan Feb, what's he going to say?
So the answer to the bonuses is simple. Award them as shares in trust for at least five years. If the horses they backed are still looking good five years down the road, then the shares are released. If not, they are taken back by AZ. It's not unlike the issue of bankers' bonuses, but perhaps with a longer timescale.
Cambridge seems so very far away.....
"Due diligence seems to have been done with blinkered eyes."
more likely it's done by people who have objectives to sign up external collaborations to get their bonuses. By the time reality strikes the bonuses are banked and it's someone else's problems. HR's performance-based bonus culture in action....
I totally agree - one other thing, the people who did the scientific due diligence on Fostamatinib were the same ones who failed to deliver an R&I portfolio from internal R&D so why is it they were considered capable of spotting winners from external companies when they clearly could not do so with their own internal R&D projects ? Amazingly most are still there.......
And my crystal ball tells me the BIND collaboration is yet another bad decision. What's bizarre is that there is significant concern about this within some areas of AZ ! Due diligence seems to have been done with blinkered eyes.
Fostamatinib was bought in having already had some poor clinical results. AZ argued these away and now face the inevitable failure.
once again the true value of external collaborations is demonstrated!
AstraZeneca scraps Rigel arthritis pill in new R&D blow
AstraZeneca is ending development of a rheumatoid arthritis pill that was one of its few late-stage experimental medicines, following disappointing overall results.
The decision is a fresh blow to AstraZeneca's already sparse new-drug pipeline and a bigger setback for Rigel Pharmaceuticals, the U.S. biotech firm that struck a licensing deal for fostamatinib with Britain's second-biggest drugmaker in 2010.
For AstraZeneca, the move will result in a $140 million impairment charge relating to intangible assets, to be taken in the second quarter, although this will not affect its financial guidance for 2013, which is based on "core" earnings.
Scrapping fostamatinib is not a complete surprise, since a series of clinical trials over the past six months have been disappointing, suggesting that the new pill would struggle to compete in an increasingly crowded marketplace.
But it highlights the hazards facing new CEO Pascal Soriot as he bets on new drugs that he hopes can replace revenues from older products, which are losing patent protection.
"Today's news ... reminds investors that the stock carries significant pipeline execution risk," said Panmure Gordon analyst Savvas Neophytou.
AstraZeneca has suffered a number of previous research setbacks, including the 2012 failure of an antidepressant licensed from another U.S. biotech company, Targacept.
Announcing the final batch of late-stage Phase III clinical trial results for fostamatinib on Tuesday, AstraZeneca said it would now return rights to the compound to South San Francisco, California-based Rigel.
Rigel's fortunes are closely tied to the medicine, since it does not yet have any drugs on the market, and its shares fell 7 percent in pre-market Nasdaq dealings.
AstraZeneca was down 0.2 percent by 1015 GMT, underperforming a 0.4 gain in the European healthcare index.
what's happened at Pfizer?
That's precisely the point that the poster made. By definition, the most expensive will be long serving employees and hence tend to be in the older age range. Regardless of how AZ does it the result will be the same in that the vast majority of layoffs will be older employees. It makes perfect business sense to those at the top who know the cost of everything and the value of nothing. Sadly, its also short-term, myopic and ultimately self-defeating as the Pfizer mess confirms.
identifying the most expensive is very different to discriminating based on age
"I seriously doubt that, not least because it would be illegal. If it turned out that not one person over the age of 50 was offered a move to Cambridge AZ would open itself up to all manner of lawsuits"
Its also illegal to drive at 85 in a 70 zone but people do it because the chance of getting caught is low. The history of large corporations is littered with example of illegal behaviour and AZ is no different. In addition, you only have to look at Pfizers methods through each of their 'mergers' and downsizing. They were clever enough to avoid setting an age limit which would be too easy to spot. Hence, they used following technique through each layer of downsizing and the Pharmacia, Warner-Lambert and Wyeth mergers (n=3 - should satisfy most statisticians).
1. Identify most expensive sites within context of whole business. Delete regardless of 'productivity'
2. Identify most promising therapeutic areas or most useful processes/departments. Retain and transfer to other sites.
3. If possible and financially acceptable, identify selected key individuals and transfer or offer positions elsewhere.
4. Reassess manpower in terms of pension/401k liability and ATS accordingly.
In other words, regardless of age, if you were perceived too expensive in terms of future payouts from these schemes you were almost certain to be cut. Yes, this meant that the distribution was slanted to older individuals but the decision to cut was made on business grounds and not age as such. Good luck to any lawyer in trying to prove otherwise. In any case, in both the UK and the US, the package you were given came with a nice final sheet to sign which essentially 'shuts you up'. So as you can imagine, concrete figures are difficult to come by but after each of Pfizers mergers, staff with over 20 years clearly constituted the majority of cuts. Please don't think your track record or experience provides any protection. And don't be too surprised if they also use Pfizers technique of making you re-apply for your own job or for other positions. Its another perfectly legal way of removing expensive staff.
And finally, remember, the purpose of these reorganisations is not to improve long term corporate productivity. The individuals making these decisions will not be with AZ in 10 years and so they have no reason to plan any further into the future than absolutely necessary; most will have comfortably retired thanks to you and me while others will have used their short-term 'strategic decisions' to justify nice career moves elsewhere. This whole fiasco is nothing more than a knee-jerk reaction to improve the short term bottom line and make the company look better to the market. None of this will help us find drugs.
I lived and worked in Sweden for AZ as a non-Swede and had a completely different experience - plenty of women, non-Swedes and over 50's were gainfully employed at all levels. Yes, there was the Jack Welch forced-ranking, as there was in the UK and US, but it didn't go as far as firing the bottom 10%.
My daughter lives and works (or rather worked before she was culled by MS) in Sweden.
Swedish companies are subtly racist and ageist. Anyone over 50 is perceived as being expensive. Their expertise is of no value. So "off you trot".
Anyone who is not a native Swede, or in Stockholm a native Stockholmer, is not considered. Women of child-bearing age? Forget it.
Swedish companies also practice the Jack Welch school of management: Fire the bottom 10%. The definition of poor performance is subject to the whim of one's manager.
Those fired are being offered their jobs back at 50% of their previous salaries. The bosses of course continue to rake it in.
Swedish Government recognises the problem but is doing 'k-all about it. Any wonder there are riots in Stockholm, etc?
AZ will be no different. 1000's of jobs at the new Cambridge R&D site? All pigs fed, fit and ready ot fly.
You always get the odd wanker on this site
Over 50 NOT wanted - HR has asked that positions NOT be offered to the 50 plus crowd. Instead drop a band and pick a 30 or 40 year old
I seriously doubt that, not least because it would be illegal. If it turned out that not one person over the age of 50 was offered a move to Cambridge AZ would open itself up to all manner of lawsuits.
There were over-50's moved to Molndal.
Hopefully today's NYSE answered your question...
"There's only one thing which puzzles me. Why is the share price now higher than it has been since about 2002 ?"
the share price is high because the markets are being flooded with newly printed money from the central banks combined with negative real interest rates (compared to inflation) and central banks crushing government bond yields by buying them all up at virtually zero return. The effect of all of this is to force all the newly printed money, and anyone else's capital, to go searching somewhere for a yield and stocks generally are giving a better yield than bonds - 'junk' status bonds are now paying less that AAA rated government bonds were a few years ago! All the stock markets across the globe have rocketed this year and are at record highs because of this. AZ pays a good dividend and so a lot of this money is finding it's way to buying AZ stock. AZ stock is only going up in line with all other healthcare stocks, and all stocks generally - it's nothing to do with AZ's performance or it's perceived future performance but solely down to central bank action. But be careful - this is a classic 'bubble' and all bubbles eventually burst. When this one does stock prices will revert back to fundaments which is probably about half where they (the markets generally) are now.
One thing some AZ folks need to realise is that this is happening in all Pharma and if you have been directly, adversley impacted then yes it is sh*t and it doesn't matter which company did it to you. AZ are not particularly worse with redundancy in terms of how they treat employees they are just in a worse place with regards finances and pipeline. Big corporate (whatever the sector) need to make decisio0ns tyat seem ludicrous to us little folk. Sometimes, with hindsight those decisions are toilet and sometimes they come off. The point being that most of the time something has to change and a bl**dy difficult decision has to be taken.
I can understand the bitterness, having been on the receiving end a couple of times from other Pharma and ultimately you have no choice but to get on with it.
With forums such as these you tend to get the extreme opinions rather than middle ground (and let's face it they make more interesting reading!) so try not to bite too hard or if you do then go for it and make the post interesting rather than just saying...."you're a twat" or other such intellectually stimulating opinions
The reason for the higher share price is that the market realizes that McKillop was a failure as was Brennon. With the move to Cambridge and the massive restructuring the market feels that at last AZ is really being reshaped. As always the market projects ahead and is mostly wrong! I am keeping the shares for the dividend but remain to be convinced aboutvthe real intrinsic worth of AZ. I have a 10% stop loss and will sell and move into GSK if needed.
The seeds of failure were sown in 1999 at the time of the AZ merger, toted at the time as the most successful big-Pharma merger of equals. In reality, Tom McKillop and colleagues wallowed in the glory of their newly-created empire and, quite frankly, wasted resources which should have been used to develop a robust pipeline with contingencies against failure. Why can I say this ? Simply because when David Brennan took over in 2006, he was reputed to have said, "great job, shit timing". DB could perhaps have reacted more aggressively, and I suppose his over-reaction was probably the rather costly purchase of MedImmune. The jury is still out on this one. However, given the extended timelines we are all aware of, the writing was already on the wall. I've lost count of the number of times we have heard that AZ development timelines are amongst the longest in the industry and we must shorten them. Well, so far, we have not, and that is why (together with backing some wrong horses) we are now embarking on a Wave 3 re-organisation. There's only one thing which puzzles me. Why is the share price now higher than it has been since about 2002 ?
But some companies adjusted their research and corporate strategy to reality, AZ didn't.
industry-wide the salad days are over, not just AZ
The salad days are over - face it.
No amount of delusion can change the facts; AZ have:
Failed to re-popuate a pipeline that has suffered knock-back after knock-back
Shrunk, and continue to shrink to stem the bleed
Introduced a 'new' strategy on a two-yearly basis for the last 6 years or so to no effect
The magnitude of what is needed to fix the status would appear to be found by a relocation to happy valley. Of course.
Listen to the loudening voices - re-assess your options and head for the exit signs, if they are lit up for you.
Mant thanks for stating the blo...y obvious
Across R&D, highest level positions and middle manager positions are disappearing...complete reorganization with reductions in head counts. It is going to be a bumpy ride.
AZ have been very good to me over the years. The pay is good, the hours are good and when the show is over they'll pay my mortgage off for me. I know plenty in other companies that can't believe how generous AZ are. However the reason they are generous is because they know they've messed people around and they know that unless the move package is good the only people to move will be managers. We all know that managers don't discover knew drugs.
10.27 I think you see things with an element of rose tinted specs. There were many people who did not have the option of a job in the UK. Yes the redundancy or relocation package was good but its nieve to think AZ care about individuals they simply needed some people to move. If you look at how many did actually move the % is low.
It great to point fingers at middle management as the ones to blame for AZs woes, everyone on here likes to point at a levels they are not. In reality blame is shared at all levels but ultimately it is senior management must take the lions share for getting the overall strategy wrong and they must have or they wouldnt change it annually.
Good luck in your world of optimism I don't believe my new company really cares but it is much more 'fun' and for that reason Im glad I'm out.
I agree 10.27, people need to cheer up. There are many bitter former AZ employees on this thread. I am still with the company, was one of the few who was mapped to a role two days ago and it is a relief! I still have a job while most of my colleagues are going through really tough times. I am based in Mölndal and I have to admit, Cambridge sounds like a fresh start for the company, just a bit worried we won't be able to compete against Cambridge & Boston but that's three years from now ;-)
10.27 here. 00:42 no need to get personal,!!! If you are unable to contribute to a discussion thread without resorting to name calling then feck off ! Why do people like you hide behind anonymous postings ? Online hard guy are we ? Anyway just want to clarify that I took Redundancy when AZ decided to shut Charnwood despite having 3 further options to stay with them...... 2 roles at Alderley & a role at Molndal. What other company would bend over backwards to ensure the 50-55 group had jobs long enough to qualify or pension, or offer an early release scheme without penalties or pay all grades a years bonus to sit alongside an industry leading re-location package,not to mention the 100 other things I haven't got time to mention ! The purpose of the my previous posting is that AZ are a people focused company but unfortunately through bad strategy, bad luck & bad middle management they are now in a bit of a tight spot & need to do something drastic. AZ will fight hard to keep the hard working high performing people who will make Cambridge a success, the rest of you will be happy with a buying bank balance and many opportunities to further your career. Cheer up !
I think it makes a valid point. There are people that come on here that seem to be living under the illusion that it is just AZ making people redundant. There are plenty of people that have taken their advice to 'get out while you can' or to 'move on' and have since been made redundant again. A dose or realism is needed.
Agree 10.27 - tosser!
The post at 10.27 is absolutely shameful. Own goal.
DECS changed to Discovery Sciences about 2 years ago, currently it's the biggest iMed in the company, although they seem to be working to rectify that.
It lost about 50 positions globally in this last announcement.
I spunk in the very eyes of the faithless.
"To Mr Cheerful below. I couldn't persuade my family to move first time and am pretty relieved not to have egg on my face by facing redundancy and upping sticks so soon after the last time. Moving and finding a new job every 2 years is not my parters idea of a good time, yours must be more understanding."
you should probably get one of those 'guaranteed for life' jobs......
Does DECS still exist or was it incorporated into GSA?
To Mr Cheerful below. I couldn't persuade my family to move first time and am pretty relieved not to have egg on my face by facing redundancy and upping sticks so soon after the last time. Moving and finding a new job every 2 years is not my parters idea of a good time, yours must be more understanding.
Thank you AstraZeneca Human Resources Dept!
Yes I would pick AZ. I worked at Charnwood for +17 years and enjoyed myself immensely. I value AZ as a company with a real passion for its people. where else would you have at least 3 excellent options when for geographical & money saving reasons they decide to shut a site ? now don't get me wrong i was devastated as were my family when Charnwood was on the wrong end of the re-organisation. But over time I have a chance to reflect and career wise it was the best thing to have happened. THe family have settled in to our new home & surroundings well. For those folk who moved from Charnwood to Alderley it has a greater impact no doubt but the re-location-package and another years salary as a bonus should soften the blow somewhat. Making the move to Cambridge should be met with open arms, a great opportunity to be part of something innovative, fresh, exciting whilst making history along he way. The alternative for those of you not going to Cambridge is a fantastic redundancy package (even for those post 2006) & a great opportunity to work elsewhere doing the same or changing careers altogether. Chin up folks life is good
With AZs reputation are they going to be able to recruit good people in Cambridge? If you had a choice would you pick AZ
Apparently the Cambridge move will be done in two stages as they cannot make the build in one go. Therefore it seems the first group of people will move in 18 to 20 months and then the second group will move in the 12 months after that. AZ are not going to keep this second group on AP for a further 12 months so expect most people in this second group to get cut!! What a company!
AZ has been going through major restructuring/New disease strategy for years and they have no drugs in development, could there be a link? Good luck to all involved. There are better companies out there and better things to do. Redundancy is not as bad as it might seem, AZ got rid of me and work is now great.
I worked at Sodertaljie until they closed the department in 1998 and I was made redundant. I think the redundancy pacage I was paid was very good and I was impressed with them as they also apid for my relocation back to the UK. I enjoyed working at Sodertaljie it's a shame I can't say the same thing about working for them in the UK prior to going to Sodertaljie. I miss Sodertalje and it was difficult finding work but I have learnt to adapt.
Cambridge Biomedical Campus is location. Francis Crick Ave. 750k sq ft. Access to Addenbrooks & M11.
To sum up if you have survived this in 18 months time you may be gone in the next reshuffle. If you are finally offered a Cambridge move you make a loss because of property prices in Cambridge. Take some advice move to a good CRO!
Guys, I am so grateful I didn't join your shop! Good luck to all of you.
Heard this from someone in GSA
Interim reductions- not the structure going forwards to Cambridge.
Current directors in UK all redundant.
GSA size down from 260 to about 140.
Large animal services cut by 50% other depts similar
New large group called regulatory safety formed.
New discovery safety group formed (split lab/project role)
Most lab technical jobs going in safety.
No internal GLP studies
Discovery safety job roles changed by >40% so everyone into pools, For new groups for people in pools they apply by june 7th, selection on capabilities mostly.
Selection complete by end of June
New structure running by September.
Further changes and reductions to come as the final Cambridge shape is yet to be decided in the future
Two new directors to be recruited
There was a lot to take in for the person and a lot of slides so if there are bits wrong apologies. Lots of pain for those now in limbo
What is happening at Alderley Park?
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