DRUGS giant AstraZeneca warned profits would be at the lower end of its expectations after suffering setbacks in its efforts to produce new blockbuster treatments.

The UK’s second-biggest medicine maker said an ovarian cancer drug called olaparib will not progress for further development after tests revealed it was unlikely to prove effective.

And the results of tests on drugs for patients with major depressive disorders were disappointing, although research is still ongoing.

The group said it will take impairment charges of £246m in the final quarter of 2011, which mean that its earnings were likely to be in the lower half of its range of forecasts.

Shares closed 44p down at 2905p amid fears that Astra, which employs about 11,000 staff in the UK, has relatively few new drugs to replace its existing stable.