Highlights of AQR Capital’s 3Q14 positions (Part 8 of 9)

(Continued from Part 7)

AQR sold AstraZeneca

AQR Capital sold its position in AstraZeneca during the third quarter of 2014. The stock accounted for 0.24% of the 2Q14 portfolio.

About AstraZeneca

AstraZeneca is one of a few pure-play bio-pharmaceutical companies that span a medicine’s entire value chain. The company is involved in research, early and late-stage development, manufacturing, and distribution. The company’s three important areas are:

1. Cardiovascular and metabolic disease

2. Oncology

3. Respiratory, inflammation, and autoimmunity

AZN plans to expand its biologics-manufacturing center to support its maturing pipeline. Biologics currently represent ~50% of its overall pipeline.

AstraZeneca to buy Definiens

On November 4, AZN’s global biologics research and development arm agreed to acquire privately held Definiens for $150 million. Definiens has pioneered a world-leading imaging and data analysis technology, which dramatically improves the identification of biomarkers in tumor tissue. The transaction will strengthen AZN’s focus in immuno-oncology.

Slide in profit in 3Q14

Sales rose 5% to $6.54 billion, helped by delays in the launch of a cheap copy of AstraZeneca’s heartburn pill, Nexium, by Ranbaxy Laboratories. Net profit fell to $254 million, compared to $1.25 billion in 3Q13. Core earnings per share were $1.05, 8% down from $1.22 as AZN is investing in marketing and new drug development.

Its blood-thinning drug, Brilinta, reported revenue increase of 78%. The company’s diabetes franchise reported revenue growth of 139% due to the strong US Farxiga launch and good uptake of Bydureon Pen.

Pipeline of products

During the quarter, FDA approved type 2 diabetes drug Xigduo XR, and opioid-induced constipation treatment Movantik. AZN received a positive opinion by the Committee for Medicinal Products for Human Use (or CHMP) for Lynparza, an ovarian cancer treatment.

AstraZeneca achieved positive phase three data for intra-abdominal infection treatment with ceftazidime-avibactam and gout therapy with lesinurad.

AstraZeneca’s divestment

On November 6, AZN entered into a definitive agreement with Aegerion Pharmaceuticals, Inc. (AEGR) to sell its Myalept drug for $325 million. Myalept treats a rare disease associated with the loss of fat tissue. With the divestment, AZN can focus on core strategic priorities.

Strategic transaction with Almirall

On November 3, AZN completed a transaction with Almirall. AZN owns the rights to develop and commercialize Almirall’s proprietary respiratory business. This includes rights to revenues from Almirall’s existing partnerships. It also includes a pipeline of investigational novel therapies.