AstraZeneca was formed on 6 April 1999 through the merger of Sweden’s Astra AB and Britain’s Zeneca Group plc. Its subsequent history included patent losses on major medicines, a reorganisation of research, Pfizer’s unsuccessful takeover approaches and acquisitions that expanded its biologics and rare disease businesses.
The company brought together established gastrointestinal, cardiovascular and cancer medicines. Over the following decades, acquisitions and research partnerships added treatments and development programmes beyond that inherited portfolio.
The merger and its predecessors
Astra and Zeneca announced their all-share merger in December 1998. Their boards presented the combination as a way to strengthen research and bring together complementary products and sales operations.
The announced terms provided for Zeneca shareholders to hold 53.5% of the combined company and Astra shareholders 46.5%, assuming full acceptance of the merger offers. These were the ownership proportions specified in the proposal.
The announcement set out plans for corporate headquarters in London and research headquarters in Sweden, with major research operations also in Britain and the United States. It identified five principal pharmaceutical areas: gastrointestinal medicine, cardiovascular disease, respiratory disease, oncology, and local and general anaesthesia.
Astra’s history began in 1913, when doctors and apothecaries founded the company in Södertälje, Sweden. Borje Gabrielsson led the business from 1927 to 1957. Astra introduced Xylocaine, a local anaesthetic based on lidocaine, in 1948; later products included the gastrointestinal medicine Losec, marketed in the United States as Prilosec, and the cardiovascular medicine Aptin.
Astra also developed Zelmid, an early selective serotonin reuptake inhibitor introduced in the early 1980s. The medicine was withdrawn following concerns about adverse effects.
Zeneca became a separate company in 1993 through the demerger of Imperial Chemical Industries’ pharmaceuticals, agrochemicals and specialty chemicals businesses. Its cancer medicines included Casodex, Nolvadex and Zoladex.
Zeneca’s expansion into cancer care services included a 50% investment in US clinic operator Salick Health Care in 1995, followed by the purchase of the remaining stake in 1997. At the time of the Astra merger announcement, Zeneca was exploring the divestment of its specialty chemicals business.
Nexium and the expansion into biologics
Nexium, a follow-on treatment to Losec and Prilosec for acid-related conditions, was first launched in Sweden in August 2000. AstraZeneca’s reported annual sales figures for 2001 through 2005 totalled approximately $14.4 billion for the medicine.
The company also established research collaborations with businesses including Astex Therapeutics and Targacept. Acquisitions added further research capabilities, particularly in cancer and biologic medicines.
The purchase of KuDOS Pharmaceuticals, announced in 2005, was completed on 31 January 2006. AstraZeneca’s subsequent financial statements recorded cash consideration of $206 million. KuDOS developed cancer treatments based on inhibiting DNA repair.
AstraZeneca acquired Cambridge Antibody Technology in 2006 and completed its acquisition of MedImmune in June 2007. The MedImmune agreement had been announced with an enterprise value of $15.2 billion. AstraZeneca brought the businesses’ capabilities together in a biologics organisation under the MedImmune name.
Analysts were reported to have questioned the MedImmune purchase price and the maturity of its late-stage pipeline. The acquisition nevertheless became a substantial part of AstraZeneca’s expansion into biologics.
In February 2007, AstraZeneca also announced an agreement to buy Arrow Therapeutics for $150 million in cash, subject to debt and working capital adjustments. Arrow’s antiviral programmes included research involving hepatitis C and respiratory syncytial virus.
Patent losses and generic competition
Several major AstraZeneca medicines faced generic competition as the company entered the 2010s. The timing varied by product, country and type of patent or regulatory protection.
Arimidex encountered US generic competition in June 2010. Teva announced FDA approval and the commercial launch of its generic version on 28 June that year.
The patent covering Seroquel’s active ingredient expired in September 2011, with US paediatric exclusivity continuing until 26 March 2012. Seroquel XR had additional formulation protection and separate generic-entry agreements. Crestor’s principal US substance patent was due to expire in 2016.
Nexium was also the subject of patent litigation. An April 2008 settlement allowed Ranbaxy to begin selling a licensed US generic version from 27 May 2014. That was a permitted entry date under the agreement, rather than evidence that Ranbaxy launched the product then.
These losses of protection coincided with AstraZeneca’s efforts to improve research productivity and develop replacements for established medicines.
Research restructuring and Soriot’s appointment
AstraZeneca began a major revision of its research and development strategy in 2011. A central element was the 5R framework, which assessed potential medicines against five criteria: the right target, tissue, safety, patient and commercial potential.
Pascal Soriot became chief executive on 1 October 2012. In March 2013, AstraZeneca announced plans to concentrate small-molecule and biologics research around Cambridge in England, Gaithersburg in Maryland and Mölndal, near Gothenburg, in Sweden.
The proposals included establishing the corporate headquarters in Cambridge and ending AstraZeneca’s research and development work at Alderley Park in Cheshire. Approximately 1,600 roles were to relocate from Alderley Park. The wider plans also included US job reductions and the transfer of most London-based corporate and global commercial roles.
The authors of the 2018 study Impact of a five-dimensional framework on R&D productivity at AstraZeneca reported that success rates from candidate nomination to phase III completion increased from 4% in 2005–2010 to 19% in 2012–2016. The figures describe the experience assessed in that study; they do not establish that the framework alone caused the improvement.
Pfizer’s unsuccessful approaches
Pfizer made several approaches to acquire AstraZeneca in 2014. Its final proposal comprised cash and shares with an indicative value of £55 per AstraZeneca share, based on Pfizer’s closing share price on 16 May 2014. The aggregate value was reported at £69.3 billion, approximately $118 billion at the time.
AstraZeneca’s board rejected the proposal, saying it undervalued the company and its prospects. Chairman Leif Johansson argued that Pfizer had failed to make a compelling strategic, business or value case.
The board also raised concerns about research spending, employment, transaction risks and Pfizer’s proposed tax inversion. These were concerns expressed by AstraZeneca during the takeover discussions.
As part of its case for remaining independent, AstraZeneca set a target of annual revenue exceeding $45 billion by 2023. That was a company forecast made while it was developing its pipeline and dealing with losses of product exclusivity.
Respiratory acquisitions and rare diseases
AstraZeneca continued to acquire medicines and businesses after the Pfizer approaches. In October 2014, it completed the transfer of rights to Almirall’s respiratory franchise. The agreement specified an initial $875 million payment and up to $1.22 billion in development, launch and sales milestones—approximately $2.1 billion combined—plus additional sales-related payments.
In December 2015, AstraZeneca agreed to acquire Takeda’s core respiratory business for $575 million. It also agreed in 2015 to acquire ZS Pharma for approximately $2.7 billion, adding a development programme for hyperkalemia, or elevated blood potassium.
Oncology medicines including Tagrisso and Imfinzi subsequently became important products in the company’s portfolio.
AstraZeneca completed its acquisition of Alexion on 21 July 2021, expanding into rare disease medicines and adding to its immunology research capabilities. The group’s later rare disease portfolio included Soliris and Ultomiris.
The Oxford COVID-19 vaccine
In April 2020, the University of Oxford announced a partnership with AstraZeneca for further development, large-scale manufacture and potential distribution of its COVID-19 vaccine. Oxford and its spinout Vaccitech jointly held rights to the underlying platform technology.
The vaccine, known during development as AZD1222 and later as Vaxzevria, used a modified chimpanzee adenovirus to carry genetic material encoding the SARS-CoV-2 spike protein.
The UK Medicines and Healthcare products Regulatory Agency authorised the vaccine on 30 December 2020. Its storage requirements of 2°C to 8°C allowed conventional refrigeration.
Oxford and AstraZeneca said when announcing their partnership that they would operate on a not-for-profit basis for the duration of the pandemic. The rollout later involved disputes with the European Commission over vaccine deliveries.
Safety guidance changed as regulators assessed reports of rare blood clots accompanied by low platelet counts. On 7 April 2021, the MHRA said evidence of a possible link with the vaccine had strengthened, while further investigation was needed. At that stage, the agency said the benefits of vaccination continued to outweigh the risks.
Revenue and the portfolio through 2025
AstraZeneca reported total revenue of $45.8 billion for 2023, $54.1 billion for 2024 and $58.7 billion for 2025. The 2023 figure exceeded the revenue threshold in its 2014 target, following a period that included further acquisitions.
By 2025, its portfolio included Tagrisso, Imfinzi, Farxiga, Calquence, Enhertu through its collaboration with Daiichi Sankyo, and Alexion’s rare disease medicines. The business encompassed oncology, cardiovascular, renal and metabolic medicine, respiratory disease and immunology, and rare diseases.
