Mystery at AstraZeneca: Is CEO Soriot Staying or Going?
July 13 2017 - 7:59AM
Dow Jones News
By Denise Roland
LONDON--Is AstraZeneca PLC Chief Executive Pascal Soriot staying
or going?
Shares in the U.K.-based drug giant fell sharply Thursday after
a news outlet in Israel reported late Wednesday he was moving to
lead Teva Pharmaceuticals Ltd., an Israeli generics drugmaker that
has been looking for a new chief for months.
AstraZeneca has declined to comment on the report, calling it
"speculation"--but it has stopping short of a denial, rattling
investors. Shares in AstraZeneca were down 4.6% at GBP49.53 ($63.8)
Thursday midmorning in London. Teva shares were up 5.7% at 116.40
shekels ($32.9).
Dr. Soriot has led the company since 2012. He played a leading
role fighting off an unsolicited takeover approach by U.S. giant
Pfizer Inc. two years later. As part of that defense, Dr. Soriot,
who trained as a veterinarian and came over from rival Roche
Holding AG, pledged AstraZeneca's reinvigorated research and
development pipeline would super charge revenue over the next 10
years.
Three years into that commitment, Dr. Soriot is facing a crucial
milestone this year. He had said 2017 would be the year sales would
bottom out and start to grow strongly. Early results for a closely
followed lung-cancer treatment are also expected within weeks.
Those results could either bolster investor confidence in that
turnaround, or sow further worry.
Investors this year have given Dr. Soriot a big vote of
confidence. Shares have risen more than 20% year-to-date, as of
Wednesday's closing price. He has presided over a series of
high-level executive departures during his tenure. His own
departure to Teva could be another big disruption.
Late Wednesday, Israel's Calcalist business news website
reported Dr. Soriot had agreed to lead Teva. An AstraZeneca
spokeswoman said it wouldn't comment on "market rumors and
speculation." A Teva spokesman also said it doesn't comment on
"market rumors."
Within weeks, AstraZeneca is expected to announce the outcome of
a key clinical trial, dubbed Mystic, that will signal whether one
of its biggest bets--on a new class of cancer drugs--is likely to
pan out. Given that timing, "the most positive interpretation would
be that he thinks he has effected a major corporate transformation
during five years at AstraZeneca," said UBS analyst Jack Scannell
in a note to clients. "A bearish interpretation could be that he
has less confidence in the path that Astra has transformed itself
to pursue."
For Teva, appointing Dr. Soriot would be the latest effort to
bring about its own overhaul. Like other generic-drug makers, it
faces a tough pricing environment and intensifying competition for
copycat medicines that is squeezing the industry's margins. The
company must also deal with $32 billion in debt and a sprawling
supply chain accumulated through acquisitions.
The Israeli company has been searching for a new chief executive
since February, when former boss Erez Vigodman departed the company
for undisclosed reasons. Teva's longtime Chief Financial Officer
Eyal Desheh exited last month.
Investors expressed surprise at the idea that Dr. Soriot, a
veteran of the branded prescription drug industry, would consider
moving into generics.
Andrew Baum, analyst at Citi, said he had "significant trouble
reconciling the timing of the potential departure pre-Mystic and
Dr. Soriot's skill set match with Teva."
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
July 13, 2017 07:44 ET (11:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Astrazeneca (LSE:AZN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Astrazeneca (LSE:AZN)
Historical Stock Chart
From Apr 2023 to Apr 2024