AZN » Topics » STRATEGIC ALLIANCES FORMED AS PART OF OUR EXTERNALISATION STRATEGY MAY BE UNSUCCESSFUL

This excerpt taken from the AZN 20-F filed Mar 27, 2007.
STRATEGIC ALLIANCES FORMED AS PART OF OUR EXTERNALISATION STRATEGY MAY BE UNSUCCESSFUL
We may pursue acquisitions of complementary businesses, technology licensing arrangements and strategic alliances to expand our product portfolio and geographic presence as part of our business strategy. Examples of recent such strategic alliances include:

> Collaboration with Bristol-Myers Squibb Company to develop and commercialise two investigational compounds being studied for the treatment of Type 2 diabetes.
   
> Collaboration with Pozen Inc. to co-develop fixed dose combinations of naproxen and esomeprazole for chronic pain, utilising Pozen’s proprietary formulation technology.
   
> Agreement with AtheroGenics, Inc. to develop and commercialise their anti-inflammatory cardiovascular product candidate for the treatment of atherosclerosis.
   
> Acquisition of Cambridge Antibody Technology Group plc and KuDOS
Pharmaceuticals Limited.

We may not complete these types of transactions in a timely manner, on a cost-effective basis, or at all, and may not realise the expected benefits of any acquisition, licensing arrangement or strategic alliance.


 


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174 ASTRAZENECA ANNUAL REPORT AND FORM 20-F INFORMATION 2006

RISK FACTORS CONTINUED

 

Other companies may also compete with us for these strategic opportunities. When we are able to complete these transactions, the success of these types of arrangements (whether already existing or to be entered into in the future) is largely dependent on the technology and other intellectual property acquired from a business or contributed from our strategic partners and the resources, efforts and skills of our partners. Disputes and difficulties in such relationships are common, often due to conflicting priorities or conflicts of interest. The benefits of these alliances would be reduced or eliminated should strategic partners: terminate the agreements; fail to devote sufficient financial or other resources to the alliances; or suffer negative outcomes in intellectual property disputes.

If these types of transactions are unsuccessful, our operating results will be negatively impacted. In addition, integration of an acquired business could result in the incurrence of significant debt and unknown or contingent liabilities, as well as the negative effects on our reported results of operations from acquisition-related charges, amortisation of expenses related to intangibles and charges for impairment of long-term assets. These effects, individually or in combination, could cause a deterioration of our credit rating and result in increased borrowing costs and interest expense. We could also experience difficulties in integrating geographically separated organisations, systems and facilities, and personnel with diverse backgrounds. Integration of an acquired business may also require management resources that would otherwise be available for ongoing development of our existing business.

Under many of our strategic alliances we make milestone payments well in advance of commercialisation of products, with no assurance that we will ever recoup those payments, in which case our operating results may be negatively affected.

This excerpt taken from the AZN 6-K filed Mar 6, 2007.
STRATEGIC ALLIANCES FORMED AS PART OF OUR EXTERNALISATION STRATEGY MAY BE UNSUCCESSFUL
We may pursue acquisitions of complementary businesses, technology licensing arrangements and strategic alliances to expand our product portfolio and geographic presence as part of our business strategy. Examples of recent such strategic alliances include:

> Collaboration with Bristol-Myers Squibb Company to develop and commercialise two investigational compounds being studied for the treatment of Type 2 diabetes.
   
> Collaboration with Pozen Inc. to co-develop fixed dose combinations of naproxen and esomeprazole for chronic pain, utilising Pozen’s proprietary formulation technology.
   
> Agreement with AtheroGenics, Inc. to develop and commercialise their anti-inflammatory cardiovascular product candidate for the treatment of atherosclerosis.
   
> Acquisition of Cambridge Antibody Technology Group plc and KuDOS
Pharmaceuticals Limited.

We may not complete these types of transactions in a timely manner, on a cost-effective basis, or at all, and may not realise the expected benefits of any acquisition, licensing arrangement or strategic alliance.


 


Back to Contents

174 ASTRAZENECA ANNUAL REPORT AND FORM 20-F INFORMATION 2006

RISK FACTORS CONTINUED

 

Other companies may also compete with us for these strategic opportunities. When we are able to complete these transactions, the success of these types of arrangements (whether already existing or to be entered into in the future) is largely dependent on the technology and other intellectual property acquired from a business or contributed from our strategic partners and the resources, efforts and skills of our partners. Disputes and difficulties in such relationships are common, often due to conflicting priorities or conflicts of interest. The benefits of these alliances would be reduced or eliminated should strategic partners: terminate the agreements; fail to devote sufficient financial or other resources to the alliances; or suffer negative outcomes in intellectual property disputes.

If these types of transactions are unsuccessful, our operating results will be negatively impacted. In addition, integration of an acquired business could result in the incurrence of significant debt and unknown or contingent liabilities, as well as the negative effects on our reported results of operations from acquisition-related charges, amortisation of expenses related to intangibles and charges for impairment of long-term assets. These effects, individually or in combination, could cause a deterioration of our credit rating and result in increased borrowing costs and interest expense. We could also experience difficulties in integrating geographically separated organisations, systems and facilities, and personnel with diverse backgrounds. Integration of an acquired business may also require management resources that would otherwise be available for ongoing development of our existing business.

Under many of our strategic alliances we make milestone payments well in advance of commercialisation of products, with no assurance that we will ever recoup those payments, in which case our operating results may be negatively affected.

EXCERPTS ON THIS PAGE:

20-F
Mar 27, 2007
6-K
Mar 6, 2007
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