David Brennan makes way for new blood at AstraZeneca
26 April 2012
Mike Ward
mike.ward@informa.com
News of management changes at AstraZeneca is likely to go down well with investors. From 1 June, the firm’s CEO, David Brennan, and its non-executive chairman, Louis Schweitzer, will make way for new blood. Mr Schweitzer’s departure comes three months earlier than expected. Simon Loth, who is currently chief financial officer, will take over from Mr Brennan until his replacement is found.
The same day, the firm revealed a “challenging revenue picture”, that showed first quarter revenue down by 11% to $7.3 billion. Loss of exclusivity on a number of brands, and challenging market conditions made for a difficult start to the year. Unsurprisingly, on the morning of 26 April, the company’s stock price was down nearly 6%, representing a value loss of some £3 billion on the day.
Although Mr Brennan says that the decision to retire was entirely his own, pressure for changes at the top from shareholders and, reportedly, from fellow board members had been mounting over the past several months.
A patent cliff and late stage disappointments - par for the course these days for pharma - have hit AstraZeneca hard.
In recent weeks, the firm has looked – depending on your point of view – either deeply innovative or pitifully desperate.
Underlining the paucity of its own pipeline, AZ announced a “peer-to-peer” deal with Amgen, involving a one-time payment of $50 million to Amgen, to jointly develop and commercialise five monoclonal antibodies from Amgen's clinical inflammation portfolio. This week AstraZeneca said it would pay $1.26 billion for the US firm Ardea and its Phase III gout candidate lesinurad (RDEA594). AstraZeneca told Scrip recently that it was working hard to seal a number of further agreements of this type.
The company clearly needs to fill its pipeline. Yet, with MedImmune hanging over it, investors are left questioning AZ’s track record in converting acquisitions in to revenue streams.
A change at the top at AstraZeneca – and perhaps at other firms, too - must signal not only a radical shift in company strategy, but also better execution on the strategies it adopts.
