Way over budget and years late — AstraZeneca’s massive HQ project offers a troubling symbol
When Pascal Soriot took the helm at a deeply troubled AstraZeneca five years ago, one of his first acts was to slash staff and boldly blueprint a large new headquarters facility in Cambridge in the UK, where company scientists and top academics could brush shoulders and spark fresh innovation. And he planned to move in last year.
On Tuesday, though, the CEO turned out at a ceremony to make the completion of just one stage of construction. And Soriot had to concede that the building — intended to symbolize the pharma giant’s embrace of the latest technologies and scientific insights on drug R&D — had also come to represent the company’s inability to stay on schedule with its turnaround plan.
Instead of completing the job in 2016 as initially planned, Soriot told Reuters, the BBC and others that the 2,000 staffers in the area wouldn’t actually start moving in until 2018. The building is now three years behind schedule for wrapping up work.
The cost, which was originally slated at £330 million, has now broken the £500 million mark (that’s $640 million-plus at today’s exchange rate).
Soriot hasn’t been able to slow the avalanche of generics that have been wiping out key drug franchises at AstraZeneca. And some of his boldest predictions, like expanding the Brilinta franchise, have failed badly. Soriot arranged to buy ZS-9, supposedly near the market, and has been handed back-to-back rejections based on manufacturing problems. And once top programs like brodalumab have been sold off to discount buyers after disappointing researchers in the clinic.
One area where AstraZeneca can’t afford any slippage is on its pivotal MYSTIC study for a combination of durvalumab and tremelimumab, their PD-L1/CTLA-4 combo for frontline lung cancer. AstraZeneca opted to push back their initial filing plans for their big checkpoint durvalumab — now slated to fill the fifth slot behind Merck, Bristol-Myers, Roche and Pfizer/Merck KGaA — so they could shoot at a big target that might give them a big entry into the field.
That data is now due in the summer, and failure — or even a slight disappointment — is not an option.