AstraZeneca's share price is on the slide this morning after the Anglo-Swedish drugmaker said it will take a $381.5 million charge in the fourth quarter after two new drugs, for cancer and depression, disappointed in the clinic.

First up, the company said that olaparib, a PARP inhibitor, will not progress into Phase III for ovarian cancer following a review of an interim analysis of a Phase II study. This showed that the previously-reported progression free survival benefit is unlikely to translate into an overall survival benefit, "the definitive measure of patient benefit in ovarian cancer". In addition, attempts to identify a suitable tablet dose for use in Phase III studies have not been successful, AstraZeneca added.

Secondly, the second of four Phase III studies for TC-5214, partnered with Targacept, looking at the compound as an adjunct therapy to an antidepressant in patients with major depressive disorder who do not respond adequately to antidepressants, did not meet its primary end point. These results follow the failure of the first trial for the first-in-class nicotinic channel modulator, announced last month.

AstraZeneca said it will continue with the two remaining Phase III efficacy and tolerability trials and one long-term safety study for TC-5214. Results are expected in the first half of 2012 and a potential New Drug Application in the USA is planned for the second half of next year; a European filing is scheduled for 2015.

4th qtr core EPS in lower half of guidance

The termination of further development of olaparib in serious ovarian cancer (it is still being developed for breast cancer) will lead to a $285 million pretax charge, while the further impairment of $96.5 million is being taken "based on the lower probability of success for the remaining TC-5214 studies". These  charges will have an approximately $0.21 negative impact on the company’s core earnings per share in the fourth quarter.

AstraZeneca added that although its core EPS guidance remains unchanged at $7.20-$7.40 per share, it is likely to come in the lower half of this range.

The news has not gone down well with investors who are concerned about a series of pipeline failures and the company's ability to cope with patent expiries on big earners, especially beyond 2016, namely the lipid-lowerer Crestor (rosuvastatin) and the anti-psychotic Seroquel XR (quetiapine).

At 9.15 am  (UK time), AstraZeneca's shares were down 2.4% to £28.77.