AstraZeneca PLC

Company information

• Date founded: 1999
• Industry: Pharmaceuticals
• Corporate headquarters: Cambridge, United Kingdom
• Type: Public

Overview

AstraZeneca PLC is a publicly traded multinational pharmaceutical company that researches, develops, and manufactures pharmaceuticals. The corporation was formed in 1999 when two large European pharmaceutical companies, Astra AB and Zeneca PLC, merged. AstraZeneca plc is headquartered in Cambridge, United Kingdom, and it has a significant research and development operation in Sweden. The company’s main focuses have been oncology, biopharmaceuticals, cardiovascular, renal, metabolism, respiratory, and immunology treatments. The company has pioneered a number of drugs that treat lung cancer and other types of cancer. The company also helped produce a vaccine for the COVID-19 pandemic that spread around the world in 2020.

History

AstraZeneca was formed in 1999, but its parent companies formed earlier in the twentieth century. The pharmaceutical company Astra AB was established in Sweden in 1913. The company grew throughout the 1920s, and by the 1950s, it had become one of the most successful Swedish pharmaceutical companies. The company produced mostly antibiotics and anesthetics, such as Xylocaine. Astra AB used the profits from these drugs to conduct research and develop other types of treatments. For example, the company made the drug Losec, which was later renamed Prilosec, for gastroesophageal health issues. It also made Aptin for cardiovascular problems. The company began developing selective serotonin reuptake inhibitors (SSRIs) in the 1980s, though rival drugmaker Eli Lilly and Company’s release of Prozac in 1987 caused Astra AB to lose out on market share and change its focus to other types of drugs.

Imperial Chemical Industries (ICI) was formed in England in 1926 and spun off ICI Pharmaceuticals in the 1950s. ICI Pharmaceuticals developed a number of important treatments. One of its researchers, Sir James W. Black, received the Nobel Prize for Medicine in 1988 for his discovery of the beta-blocker. In 1993, ICI Pharmaceuticals demerged three of its businesses, including a pharmaceuticals producer called Zeneca. The company developed the company name with the help of marketers. The goal was to create a company name that did not have connections to any other businesses and was not offensive in any language. Zeneca grew rapidly after it spun off from ICI. Its major focus was oncology treatments, creating drugs such as Casodex, Nolvadex, and Zoladex. In 1998, Zeneca sold off its Zeneca Specialties division in an effort to become more attractive to other companies and prepare for a possible acquisition or merger.

The European pharmaceutical industry in the late 1990s was very competitive. Many companies were choosing to be acquired or to merge to stay dominant in the field. Astra AB also began looking for merger possibilities. In December 1998, Astra AB and Zeneca PLC announced that they planned to merge to form a new company, AstraZeneca PLC. The merger created a company with a value at the time of roughly $35 billion. It also created a huge multinational corporation out of two mid-tier European pharmaceutical producers. The merger was considered a merger of equals, with both companies and leadership groups playing an important role in the resulting company. Nevertheless, the merging companies estimated that six thousand jobs would be eliminated during the three years after the merger. The newly formed company chose London as its corporate headquarters and kept its research and development headquarters in Sweden.

After its formation, AstraZeneca announced it would focus mainly on cardiovascular, gastrointestinal, respiratory, oncology, and anesthesia treatments. The company’s focus shifted slightly over time, though most of those areas remained important throughout the company’s history. One of the first major drugs released by the new company was Nexium (Esomeprazole), which was released in 2000 and treats acid reflux problems. The company also produced treatments for various types of cancer.

AstraZeneca began to focus on biotechnology in the mid-2000s. The company acquired various biotechnology companies, including the American company MedImmune in 2007. When AstraZeneca first acquired these businesses, analysts were unsure whether the company’s investment would pay off. In the early 2010s, a new CEO, Pascal Soriot, began cost-cutting by narrowing the company’s focus and trimming jobs. In 2014, rival Pfizer attempted to acquire AstraZeneca, but the company’s leadership declined the $100 billion offer. That same year, AstraZeneca acquired the respiratory division of the Spanish pharmaceutical company Almirall, and two years later, it acquired the respiratory division of Takeda Pharmaceutical. In 2020, AstraZeneca was one of the numerous pharmaceutical companies that developed a vaccination against the SARS-COV-2 coronavirus, which caused COVID-19.

Impact

AstraZeneca has produced multiple drugs and treatments that have helped prevent and treat various diseases. In 2000, the company produced Nexium to treat gastroesophageal problems by reducing the amount of acid produced in the stomach. Nexium was a popular drug and brought in approximately $14.4 billion between 2001 and 2005. However, other companies produced generic forms of the drug beginning in 2014. The company released another drug Iressa, which was used as a second-line treatment for lung cancer. In 2015, the US Food and Drug Administration (FDA) approved Iressa as a first-line treatment for some types of lung cancer.

In 2020, AstraZeneca was one of several companies that developed a vaccination against COVID-19 in response to the global pandemic that killed millions of people. AstraZeneca’s vaccine was one of the first to be completed and was approved in the United Kingdom in late December 2020. However, questions about the rare but possible side effects of developing blood clots made some countries halt the use of the drug in 2021, and lawsuits were filed. AstraZeneca did not report a profit from the vaccine in the first two quarters of 2021. However, the company's 2022 report noted a 25 percent increase in total revenue, and in 2023, the company reported an operating profit of $8.2 billion, its highest profits since 2011.

In 2021, AstraZeneca was among the first companies awarded the Terra Carta Seal for excellence in innovation and leadership in addressing climate change. In 2022, AstraZeneca launched its Cancer Care Africa (CCA) program to support policy changes and improve cancer outcomes across Africa. The following year, the company launched a health-tech business called Evinova, designed to accelerate innovation. In 2024, AstraZeneca invested $300 million in a next-generation cell therapies facility in Rockville, Maryland, and named Shanghai its fifth global research and development center.

Bibliography

“About Us.” AstraZeneca, www.astrazeneca.ch/en/about-us.html. Accessed 28 Apr. 2023.

“Analysis of Proposed Consent Order to Aid Public Comment.” Federal Trade Commission, 1999, www.ftc.gov/sites/default/files/documents/cases/1999/03/ftc.gov-zenecaanal.htm. Accessed 28 Jan. 2025.

“AstraZeneca Receives FDA Approval for New Cancer Drug Iressa (gefitinib, ZD1839).” AstraZeneca, 5 May 2003, www.drugs.com/newdrugs/astrazeneca-receives-fda-approval-new-cancer-iressa-gefitinib-zd1839-275.html. Accessed 28 Jan. 2025.

“At the Forefront of Lung Cancer Treatment.” AstraZeneca, Aug. 2024, www.astrazeneca.com/our-therapy-areas/oncology/at-the-forefront-of-lung-cancer-treatment.html. Accessed 28 Jan. 2025.

"Facts and Figures." AstraZeneca, www.astrazeneca.ch/en/about-us/facts-figures.html. Accessed 28 Jan. 2025.

“Key Facts.” AstraZeneca, www.astrazeneca.com/investor-relations/key-facts.html. Accessed 28 Jan. 2025.

Lipin, Steven and Stephen D. Moore. “Zeneca Group, Astra Unveil Merger Valued at $35 Billion.” Wall Street Journal, 9 Dec. 1998, www.wsj.com/articles/SB913210382327981500. Accessed 28 Jan. 2025.

“Merger of Zeneca and Astra, Two Significant Suppliers of Pharmaceuticals, Cleared with Conditions.” Federal Trade Commission, 25 Mar. 1999, www.ftc.gov/news-events/press-releases/1999/03/merger-zeneca-and-astra-two-significant-suppliers-pharmaceuticals. Accessed 28 Jan. 2025.

"Our History." AstraZeneca, www.astrazeneca.com/our-company/history.html. Accessed 28 Jan. 2025.