AstraZeneca CEO Soriot may stay after all

AstraZeneca’s (AZ) CEO Pascal Soriot was rumoured to be going to Teva last week – but the Anglo-Swedish company has scotched these rumours by announcing he will host the company’s next quarterly results.

Last week, AZ had refused to comment on, but had not denied, a story on the Israeli news website Calcalist that Soriot was set to leave to take over at beleaguered Teva, the world’s largest generics firm.

But the invitation sent to reporters on Friday that Soriot will host the company’s financial results call on 27 July suggests that he will be staying, at least in the short term. Calcalist reported that Teva had offered Soriot a $20 million golden handshake if he took the job.

AZ’s shares dropped by almost 5% following the news – but have recovered some of this value following the announcement that Soriot will present at the results conference.

The market had been spooked because AZ is due to announce results from the crucial MYSTIC study, which is evaluating the company’s cancer immunotherapy combination drug in the lucrative first-line lung cancer indication.

If the combination of durvalumab and tremelimumab works in the indication, AZ could market the therapy in an indication expected to be worth an estimated $20 billion in sales, where Merck & Co already has a foothold with Keytruda (pembrolizumab).

Teva is struggling with the expiry of the US patent on its blockbuster multiple sclerosis drug, Copaxone, as well as an ambitious $41 billion takeover of Allergan’s generics business.

A move to hire Soriot may, therefore, have made sense as he is credited with rebuilding AZ’s drugs pipeline, although this has yet to translate into a turnaround in revenues.

AZ is also struggling to overcome the expiry on the US patent of its cholesterol drug, Crestor and, in Q1, revenues were down 12%, excluding the effects of currency, to $5.4 billion.

Soriot successfully fought off a takeover bid from Pfizer in 2014, and has been selling off the company’s older and unwanted drugs to fund R&D into new medicines.

 

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