AstraZeneca Annual Report and Form 20-F Information 2008

Development

Development projects – NCEs and line extensions

In development, we focus on ensuring that our expanding range of potential medicines is developed effectively to meet the needs of patients and regulators. Project teams bring together all the relevant skills and experience needed for the rapid progress of new medicines, the management of development risks, and ensuring that quality and safety remain fundamental considerations at every stage.

We have a wide range of compounds in early development, and a total of 34 projects in Phase I, 31 projects in Phase II and 10 projects in Phase III development and are running 23 life-cycle management projects.

Throughout 2008, we have continued to focus on improving quality and speeding the progression of early phase projects along the development pipeline to market. Backed by reduced timelines across the whole small molecule development process, Phase I cycle times have halved since 2006 and over the last three years the composite product development cycle time has now been reduced by approximately two years.

With the adoption of Lean Sigma^™ methodology and the implementation of best practice solutions, we have eliminated the lost time between key steps in the development process and we again exceeded our targets for development cycle times in 2008 for our small molecules.We believe that we are well placed to achieve our target of median composite development cycle times of eight years by 2010, based on the projects currently in development. Importantly, we have in recent years established a culture of continuous improvement that should sustain the momentum behind our initiatives for increased speed, with better quality, and with improved efficiency.

The initiatives we have in place to deliver significant productivity improvements by 2011 are making excellent progress and all are on track. These include:

• The change programme that resulted from our disease area strategy review during 2007 was completed in 2008 with anticipated financial benefits of over $100 million to be delivered by the end of 2009.
• During 2008, we centralised and outsourced our clinical data handling to our external partner, Cognizant. This has enabled us to simplify our processes, promote consistency and drive resource efficiencies across our data management. These improvements are also helping to speed our internal data interpretation and decision-making.
• Our re-organisation of the Pharmaceutical and Analytical R&D function aims to improve productivity and meet the demands of an increasingly strengthened pipeline better by changing working processes, while retaining our focus on innovation. For example, we have been able to progress a larger number of early projects by reducing the resource per project by more than 50% since 2004. The function has also downsized by 10% while introducing these productivity improvements.
• Streamlining of our regulatory function exceeded the target 18% reduction in headcount achieving a 21% reduction by June 2008.

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