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AstraZeneca

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Formed from the merger of Astra AB and Zeneca Group in 1999, AstraZeneca regularly ranks in the top 10 largest companies annually. It makes drugs like Prilosec, Nexium, Onglyza, Crestor and Farxiga.

AstraZeneca is an international biopharmaceutical company producing and marketing medicines that are used by millions of people around the world.

With more than 50,000 employees and $26.6 billion in revenue in 2014, the London-based company continues to rank among the largest drug companies in the world. Formed by the merger of two companies, Astra AB and Zeneca Group PLC in 1999, AstraZeneca focuses on four key therapeutic areas:

  • Cardiovascular and metabolic diseases
  • Oncology
  • Respiratory, inflammation and autoimmunity
  • Infection, neuroscience and gastrointestinal

It grew from worldwide successes like the pain-numbing agent lidocaine and heavily invested in research to produce revolutionary drugs. AstraZeneca couldn’t stay out of legal trouble though, paying more than $1 billion in federal fines and legal settlements for corrupting clinical trials and illegally promoting antipsychotics.

Fast Facts about AstraZeneca
Established: 1998 (Merger between Zeneca Group and Astra)
Headquarters: London
Size: 51,000 employees worldwide
2014 Revenue: $126.6 billion

AstraZeneca produced revolutionary oncology drugs and expanded its diabetes treatments with the purchase of its partner Bristol-Myers Squibbs’ entire diabetes division in 2014. The buyout brought drugs like Byetta (exenatide injection) and Bydureon to AstraZeneca.

Other drugs like Crestor and Onglyza face legal trouble from people claiming they weren’t warned of serious side effects of the drugs. Farxiga and Xigduo could cause future problems for the company too, and Byetta’s legal problems could also affect AstraZeneca.

AstraZeneca’s Popular Drugs
Drug Treats
Prilosec (omeprazole) Acid reflux, ulcers
Nexium (esomeprazole) Acid reflux, heartburn
Crestor (rosuvastatin) Heart disease
Symbicort (budesonide formoterol) Asthma, COPD
Iressa (gefitinib) Lung cancer
Zoladex (goserelin) Breast and prostate cancer
Onglyza (saxagliptin) Type 2 diabetes
Farxiga (dapagliflozin) Type 2 diabetes
Seroquel XR (quetiapine fumarate) Schizophrenia, bipolar disorder

History of AstraZeneca

Astra AB was founded in 1913 in Sodertalje, Sweden as an attempt to help Sweden compete with German and Swiss medicine, but the company was unable to achieve ambitious goals when World War I began. A dyestuffs company called ASF bought Astra in 1918 to compete in the chemical industry, but the company struggled to turn a profit for the next decade.

Astra finally became profitable in 1929, eventually increasing sales 100-fold by 1957. The company took its first step into independent research in the 1930s by developing drugs like Hepaforte – a treatment for a disease that prevents the body from absorbing enough Vitamin B12. The company purchased rivals Tika Pharmaceuticals and Paul G. Nordstrom’s factories in 1942 to become the dominant drug company in Sweden.

In 1948, Astra developed the blockbuster numbing agent Xylocaine (lidocaine), giving it a worldwide presence for the first time. The U.S. Food and Drug Administration approved it three years later, and the U.S. became its largest market. The success of the drug allowed Astra to invest more money into research.

Expansion of Astra

The company expanded worldwide, forming subsidiaries in Europe, the U.S., South America and Australia by the 1970s. Astra began focusing solely on pharmaceuticals, selling off all of its other assets by the 80s. When it launched treatments for ulcers in 1988, Astra became one of the fastest-growing companies in the world.

During the 1990s, Astra more than doubled its number of employees. Knowing its patents for ulcer drugs would expire in the early 2000s, it invested millions of dollars into research and developed six drugs that launched in 1997.

Merge with Zeneca Group PLC

Though its roots trace back to the 1920s, Zeneca was a relatively young company when it merged with Astra in 1998. Zeneca was a product of a 1993 demerger of Imperial Chemical Industries, headquartered in London.

ICI began making pharmaceuticals in the 1940s and 50s, but separated its businesses in 1993. Zeneca formed from the demerger and rode on the successes of drugs developed during its time with ICI. With patents due to expire in the early 2000s and few products in development, Zeneca saw a merger with Astra as a wise strategic move.

In December 1998, Zeneca bought Astra for $35 billion. The new company, AstraZeneca, was the fourth-largest in the world when the merger completed in 1999, worth a value of $67 billion. Each company brought blockbuster drugs with it. Astra brought Prilosec, a drug to treat acid reflux and heartburn, and Zeneca brought Nolvadex (tamoxifen) to treat breast cancer.

Fraud Charges and Litigation

Early on, the company had a history of playing it safe. In the 1970s, Astra saw the future of antidepressants. It developed the first selective serotonin reuptake inhibitor (SSRI) called zimelidine, and began selling it 1982. But the drug produced a rare side effect that could damage the nervous system, and the company recalled it a year later.

By recalling zimelidine, Astra missed out on having the first drug in a market that eventually made billions of dollars, but it showed patient safety came first. Today, it’s recovering from scandals that cost it millions of dollars in legal settlements in addition to hits on its reputation.

Seroquel Scandal

AstraZeneca played a large role in one of the most corrupt clinical trial scandals of the century.

Dr. Melissa DelBello was the lead author of a ground-breaking 2002 study that found AstraZeneca’s atypical antipsychotic Seroquel (quetiapine) was safe for use in children. AstraZeneca financed the study which included 30 children diagnosed with bipolar disorder. In the end, only eight children taking Seroquel completed the trial, and DelBello determined the study was inconclusive.

However, the study was published anyway and concluded Seroquel was more effective in children than a test group not receiving the drug. The publication led to a national recommendation that atypical antipsychotics be the leading choice for children with bipolar disorder.

Other studies involving Seroquel produced inconclusive or harmful results. Those were never published. It was later revealed that AstraZeneca systematically covered up the results. A company email used as evidence in a court case revealed: “Thus far, we have buried trials 15, 31, 56. The larger issue is how do we face the outside world when they begin to criticize us for suppressing data.”

In 2002, U.S. Sen. Charles Grassley criticized DelBello for receiving at least $238,000 in paid consulting fees and travel costs from AstraZeneca. After years of investigations, AstraZeneca paid a $520 million fine brought by the U.S. Department of Justice for promoting Seroquel for unapproved uses. The company also paid $647 million to settle global lawsuits for failing to warn the public of Seroquel’s side effects.

Dangerous Drugs and Legal Concerns

AstraZeneca’s antipsychotic controversy was just the beginning of its legal problems. The company faces scrutiny involving the safety of many of its drugs, including Crestor, Onglyza and Farxiga.

Crestor

The cholesterol drug Crestor (rosuvastatin) is used to prevent or treat heart disease, heart attacks and strokes. The FDA approved Crestor in 2003, and AstraZeneca marketed it as having the ability to reduce cholesterol levels by 52 percent. It isn’t without risks though.

Crestor’s possible side effects include Type 2 diabetes, liver damage, memory loss, muscle pain and a muscle condition called rhabdomyolysis. The FDA eventually warned of the risk for rhabdomyolysis, but other governments refused to approve Crestor because of safety concerns.

People harmed by Crestor took AstraZeneca to court, claiming in lawsuits the drug contained dangerous defects. A consumer advocacy group also called for the recall of Crestor from the U.S. market but no recall was ordered.

Onglyza & Kombiglyze XR

The FDA approved Onglyza (saxagliptin) in 2009 to treat Type 2 diabetes. It works by helping control the way the body handles blood sugar and insulin. The FDA approved a combination drug called Kombiglyze XR (saxagliptin and metformin HCl extended-release) in 2010.

AstraZeneca and partner Bristol-Myers Squibb made hundreds of millions of dollars annually from Onglyza, but many doctors worried about studies that showed a possible link between the use of similar drugs and pancreatitis and pancreatic cancer.

Years later, a study reported Onglyza increased the risk of hospitalizations due to heart failure. The FDA warned of the increased risk in April 2015. Another study linked Onglyza and Kombiglyze to severe joint pain, and the FDA issued another warning in September 2015.

A month later, a woman claimed her mother died from heart failure caused by Onglyza. She sought more than $50,000 in damages in addition to punitive damages. The case is pending in state court.

Farxiga and Xigduo

Despite its focus and investment in its diabetes portfolio, AstraZeneca lost the race to receive first approval for a sodium-glucose co-transporter 2 (SGLT2) inhibitor. SGLT2 inhibitors  are the newest class of Type 2 diabetes treatments.

The FDA rejected Bristol-Myers and AstraZeneca’s once-daily Farxiga (dapagliflozin) before approving it in 2014, making it the second SGLT2 inhibitor on the market. The FDA had originally denied it because data in studies showed a possible risk of bladder cancer. The drug carries a warning for patients with a history of bladder cancer and patients with low blood pressure. The FDA approved the combination drug Xigduo (dapagliflozin and metformin) near the end of 2014.

Possible side effects of Farxiga include urinary tract infections (UTIs), genital fungal infections and kidney problems. In 2015, the FDA warned that another SGLT2 inhibitor, Invokana, could cause a deadly condition called ketoacidosis. It is investigating whether similar drugs like Farxiga and Xigduo carry the same risks.

Numerous law firms are analyzing cases from people who suffered from ketoacidosis, kidney problems, UTIs or other conditions possibly caused by SGLT inhibitors for potential lawsuits.

AstraZeneca’s Future

AstraZeneca’s purchase of Bristol-Myers’ diabetes division was one of many actions taken by pharmaceutical companies to consolidate their businesses into more narrow, specialized areas of focus. AstraZeneca’s focuses include helping make hearts healthier, helping more people survive cancer and helping people breathe easier.

AstraZeneca may have even more legal obstacles to hurdle in coming years though, with reports that popular drugs like Nexium may increase heart attack risks.

It hopes to avoid such hassles and focus on developing new drugs to introduce to the market. The company had 11 drugs in the third phase of clinical trials entering 2014.

“AstraZeneca has completed the first phase in its strategic journey,” CEO Pascal Soriot said in the company’s 2014 annual report. “We have rebuilt strong foundations for sustainable delivery and are on track to return to growth by 2017. Our efforts are creating significant value for patients and shareholders.”