Zeneca suffering from a serious shortage of new drugs, says report

Zeneca's long-awaited report on the state of its drugs pipeline yesterday boosted a flagging share price, but concerns remain. Meanwhile Glaxo was receiving calls from investors confused about why its shares had risen on a day the company withdrew a drug that may have killed people. Sameena Ahmad reports.

A confidential independent investigation into Zeneca's drugs pipeline, believed to have been prepared by accountants KPMG, has concluded that the UK's third-biggest drug group is suffering from a serious shortage of late-stage drugs, threatening future growth, according to sources close to Zeneca.

At a presentation yesterday updating analysts on its research programme, the company moved to quash investors' concerns over the quality of its drug pipeline in the face of key drug patent expiries, saying it had "plenty of fuel in the tank" to take the company into the next decade.

While shares in Zeneca jumped 60p to 1,950p on a mood of renewed confidence about prospects, Glaxo Wellcome's shares bounced 40p to 1,340p yesterday, despite announcing that it was withdrawing a diabetes drug in the UK after six people taking it had died. The bounce in Glaxo and SmithKline Beecham's share prices yesterday followed unusual selling of the shares on Friday, prompting a Stock Exchange investigation.

At Zeneca's research and development presentation yesterday, Tom McKillop, chief executive officer of Zeneca Pharmaceuticals, acknowledged there were concerns about the group's prospects but said the company planned to double sales in the next few years and with 26 new drug introductions likely in cancer, pain and respiratory disease had "excellent" growth prospects. Mr McKillop said observers were overestimating the risks associated with the US patent expiries on its heart drug, Zestril, in 2001 and cancer drug, Nolvadex, a year later.

Though shares in the company recovered yesterday, having slumped in the past month after ABN Amro Hoare Govett, NatWest and Greig Middleton all questioned the company's prospects, several brokers remained unsatisfied. The main concerns were that Zeneca was short of drugs in late-stage development, that it had failed in its attempt to build a respiratory franchise around Accolate and find a follow-up to Zestril. Others said that the company was hampered by an inward-looking management culture which for many years had resisted looking outside its own research department for ideas.

"Most of what Zeneca has to offer is line extensions on existing products and new formulations," said one analyst. Another criticised Zeneca for failing to forge alliances with biotechnology companies fast enough. However Timothy Dyer at SGST said the results presentation was "better than what people were expecting" and James Culverwell of Merrill Lynch said Zeneca looked cheap compared to the sector.

Glaxo, the UK's biggest pharmaceutical company, said it was voluntarily halting British sales of troglitazone, its new drug to treat the common type II form of diabetes, after six patients taking the drug had died of liver failure. A spokesman for Glaxo said none of the deaths were in the UK, where the drug, branded as Romozin, had been sold since 1 October. Four of those who died were from Japan, where the drug was invented and sold by Sankyo, and two from the US, where the drug, sold as Rezulin, is co-marketed by Warner Lambert and Sankyo. Last month, Warner Lambert and Sankyo were forced to put a label on Rezulin warning doctors in the US to give patients routine blood tests, after 35 reports of liver injuries in patients.

Glaxo said that, since then, there had been 147 incidents of liver disorder, including the six deaths. Glaxo said it became concerned after learning that the first symptoms of liver damage developed on average three months after the drug was first taken. Analysts were unfazed by the news.

Start your day with The Independent, sign up for daily news emails
Seth Rollins cashes in his Money in the Bank contract to win the WWE World Heavyweight Championship
WWERollins win the WWE World Heavyweight title in one of the greatest WrestleMania's ever seen
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
tvPoldark, TV review
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor