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AstraZeneca to carve out antibiotic R&D into separate firm

LONDON (Reuters) – Drugmaker AstraZeneca has decided to carve out its early-stage antibiotic research by creating a stand-alone subsidiary company, as it sharpens its focus on other therapy areas.

Chief Executive Pascal Soriot said last year he was looking to partner or sell its anti-infective business, which is no longer viewed as a core area for the British drugmaker.

AstraZeneca said in an emailed statement it would invest $40 million in the new antibiotic company, which will include early-stage products such as a drug in Phase II for gonorrhea. The move will impact approximately 95 employees based in Waltham, Massachusetts.

The new structure has no impact on anti-infective products already on the market, including Merrem, Zinforo, Fluenz/Flumist and Synagis. It also does not affect Avycaz, a new antibiotic approved this week from Actavis, which was co-developed with AstraZeneca.

Antibiotics have fallen out of favor in the past decade among many Big Pharma companies, because of their typically low margins. The industry has focused instead on more profitable areas, like cancer.

More recently some companies have started coming back to the space, given the demand for novel medicines that can fight drug-resistant superbugs, with Merck & Co <MRK.N> agreeing to buy Cubist for $8.4 billion in December.

But AstraZeneca prefers to deploy its resources on its three priority areas of oncology; cardiovascular and metabolic diseases; and respiratory and inflammation.

The decision to carve-out early-stage antibiotics fits with Soriot’s aim of doing more so-called “externalization”, involving the sale of non-core drugs, both to increase the company’s focus and generate additional income to see it through a tough period of patient expiries on older drugs.

Last year it struck a partnership deal worth up to $500 million for Alzheimer’s treatment with Eli Lilly, which could be a model for further transactions.

(Reporting by Ben Hirschler, editing by William Hardy)

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