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AstraZeneca appoints new chief executive AstraZeneca appoints new chief executive
(about 4 hours later)
AstraZeneca has appointed pharma industry veteran Pascal Soriot from Swiss rival Roche as its chief executive, ending months of leadership uncertainty.AstraZeneca has appointed pharma industry veteran Pascal Soriot from Swiss rival Roche as its chief executive, ending months of leadership uncertainty.
He replaces David Brennan, who quit abruptly in April amid pressure from shareholders for a radical shakeup. Britain's second-largest drugmaker has suffered a series of setbacks in the late stages of drug development, at a time when patents on many of its bestselling medicines are expiring. He replaces David Brennan, who quit abruptly in April amid pressure from shareholders for a radical shakeup. Britain's second-largest drugmaker has suffered a series of setbacks in the late stages of drug development and while patents on many of its most lucrative medicines are expiring.
The appointment comes sooner than expected, and was welcomed by City analysts who noted Soriot's track record on innovation. The appointment comes sooner than expected, and was welcomed by City analysts who praised Soriot's track record on innovation.
The 53-year-old Frenchman, who started his career as a vet before joining the pharmaceutical industry in 1986, has served as COO of Roche's pharma division since 2010, a business that had sales of $34bn (£21.5bn) last year and employs 44,000 people worldwide. Before that, Soriot was chief executive of Genentech, where he led the integration of the San Francisco-based biologics business into Roche from 2009. He has held senior management roles in the US, Asia and Europe, and joined Roche in 2006. The 53-year-old Frenchman, who started his career as a vet before joining the pharmaceutical industry in 1986, has served as chief operating officer of Roche's pharma division since 2010, a business with sales of $34bn (£21.5bn) last year employing 44,000 people worldwide. Before that, Soriot was chief executive of Genentech, where he led the integration of the San Francisco-based biotech business into Roche from 2009. He has held senior management roles in the US, Asia and Europe, and joined Roche in 2006.
He will take up his new role at AstraZeneca on 1 October. The scale of the challenges he faces was underlined by the group's 28% slump in second-quarter profits in July. Soriot's pay package will be a similar mix of basic salary, bonus and long-term incentives to Brennan's, who left with a payoff worth up to £4.6m. He will take up his post at AstraZeneca on 1 October. The scale of the challenges he faces was underlined by the group's 28% slump in second-quarter profits in July.
Soriot's pay package will be a similar mix of basic salary, bonus and long-term incentives to Brennan's, who left with a payoff worth up to £4.6m.
Soriot said: "No one is blind to the challenges that confront the pharmaceutical sector and this company, but the underlying strengths of AstraZeneca in delivering on its strategy are clear."Soriot said: "No one is blind to the challenges that confront the pharmaceutical sector and this company, but the underlying strengths of AstraZeneca in delivering on its strategy are clear."
Analysts at Goldman Sachs led by Keyur Parekh lauded Soirot's "solid commercialisation experience," adding: "Mr Soirot as head of Roche Pharma had always been a strong believer in innovation". Analysts at Goldman Sachs led by Keyur Parekh noted Soriot's "solid commercialisation experience," adding: "Mr Soriot as head of Roche Pharma had always been a strong believer in innovation".
More than half of AstraZeneca's revenues could be eroded by patent expiries over the next five years, which means it "faces significant structural challenges relative others in the sector," the Goldman Sachs analysts added. The company's antipsychotic drug Seroquel lost patent protection this year while heartburn pill Nexium and cholesterol drug Crestor lose US protection in 2014 and 2016 respectively. More than half of AstraZeneca's revenues could be eroded over the next five years as a string of patents expire, leaving it facing significant structural challenges compared with other drug makers, the Goldman Sachs analysts said. The company's antipsychotic drug Seroquel lost patent protection this year while heartburn pill Nexium and cholesterol drug Crestor lose US protection in 2014 and 2016 respectively.
Analysts at Barclays led by Mark Purcell said: "Mr Soriot comes well-credentialled, playing a key role during the integration of Roche's Genentech subsidiary, thus has important expertise in change management and execution." They noted that his former roles include key posts at Germany's Hoechst, which became Aventis Deutschland and then part of Sanofi-Aventis, so he should know the diabetes field well - which is important given AstraZeneca's recent purchase of half of diabetes drug developer Amylin, with Bristol-Myers Squibb. Analysts at Barclays led by Mark Purcell said: "Mr Soriot comes well credentialled, playing a key role during the integration of Roche's Genentech subsidiary, thus has important expertise in change management and execution." They noted that his former roles include key posts at Germany's Hoechst, which became Aventis Deutschland and then part of Sanofi-Aventis, so he should know the diabetes field well – which is important given AstraZeneca's recent purchase of half of diabetes drug developer Amylin, with Bristol-Myers Squibb.
But they addded: "Although crucial, we see Mr Soriot's appointment as necessary, but not sufficient, for AstraZeneca's revival. AstraZeneca appears to have the right leadership in place ... but needs a coherent strategy, well-executed and to maximise the value of its capabilities." But they addded: "Although crucial, we see Mr Soriot's appointment as necessary, but not sufficient, for AstraZeneca's revival. AstraZeneca appears to have the right leadership in place … but needs a coherent strategy, well-executed and to maximise the value of its capabilities."
Cenkos Securities analyst Navid Malik said Soriot's arrival could signal a move towards greater involvement in fast-growing biotech medicine. "He'll have to work fast because there's an uphill struggle now to grow sales in the face of major patent losses."Cenkos Securities analyst Navid Malik said Soriot's arrival could signal a move towards greater involvement in fast-growing biotech medicine. "He'll have to work fast because there's an uphill struggle now to grow sales in the face of major patent losses."
Simon Lowth, AstraZeneca's chief financial officer, who had been running the drugmaker on an interim basis, will resume his CFO role. Lowth had been in the running for the top job and Soriot's appointment is likely to spark speculation over whether he will stay on. He had stepped up the company's dealmaking, overseeing the $7bn three-way deal for Amylin in July. Simon Lowth, AstraZeneca's chief financial officer, who has been running the drugmaker on an interim basis, will resume his finance role. Lowth had been in the running for the top job and Soriot's appointment is likely to spark speculation over whether he will stay on. He had stepped up the company's dealmaking, overseeing the $7bn three-way deal for Amylin in July.
AstraZeneca's new chairman, Leif Johansson, a former Volvo boss who replaced Louis Schweitzer when he retired earlier than originally planned, hailed Soriot's arrival as a "key appointment at an important time for AstraZeneca".AstraZeneca's new chairman, Leif Johansson, a former Volvo boss who replaced Louis Schweitzer when he retired earlier than originally planned, hailed Soriot's arrival as a "key appointment at an important time for AstraZeneca".
"We are certain that Pascal's leadership qualities combined with his strategic thinking and relevant experience make him the right person to drive the company to success over the coming years," Johansson added."We are certain that Pascal's leadership qualities combined with his strategic thinking and relevant experience make him the right person to drive the company to success over the coming years," Johansson added.
At Roche, Soriot will be replaced by Daniel O'Day, currently chief operating officer of Roche Diagnostics, and he in turn will be succeeded by Roland Diggelmann, who heads up with the Asia-Pacific region within the diagnostics division. At Roche, Soriot will be replaced by Daniel O'Day, chief operating officer of Roche Diagnostics, and he in turn will be succeeded by Roland Diggelmann, who heads up with the Asia-Pacific region within the diagnostics division.