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AstraZeneca CEO says wants more outsourcing deals

Tue Apr 15, 2008 5:13am EDT

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LONDON, April 15 (Reuters) - AstraZeneca Plc (AZN.L) wants to strike more outsourcing deals for drug manufacturing and sees an agreement with India's Ranbaxy Laboratories Ltd (RANB.BO) as a valuable part of that process.

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Chief Executive David Brennan said on Tuesday the company aimed to stop producing active pharmaceutical ingredients (APIs) in-house altogether in the long term.

"This move is absolutely consistent with our supply chain strategy," he told reporters in a conference call.

"We have been looking to outsource our manufacturing where we can ... we have long term plans to exit all API production over the next five to 10 years."

Under a settlement of a U.S. patent dispute over AstraZeneca's top-selling ulcer drug Nexium, Ranbaxy will formulate a portion of AstraZeneca's U.S. supply of Nexium from May 2010, with the active ingredient in the drug, esomeprazole magnesium, being made from May 2009.

Brennan said the deal made good commercial sense and was "perfectly lawful". AstraZeneca will file the terms of the settlement with the Federal Trade Commission and Department of Justice, two agencies which have taken a tough line on generic drug settlement deals recently. (Reporting by Ben Hirschler)

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