AstraZeneca plc (ADR) (NYSE:AZN)’s CEO Soriot Following Roche To Reverse Poor Research Records
Chief Executive Pascal Soriot’s work on fixing ailing drugmaker AstraZeneca plc (ADR) (NYSE:AZN) is in progress with declining sales and profits after his first year in the job. Yet optimism is slowly developing that he may have the right long-term recommendation for the British group, assisted by some lessons learnt at his past employer Roche Holding Ltd (VTX:ROG).
Soriot’s top priority is to reverse AstraZeneca’s poor record in drug research, valuing staff morale. Rival executives say that he is picking some ideas from Switzerland’s Roche. Soriot has ignored a big purchase in order to close the deep revenue gap generated by multiple patent expiries, choosing a string of smaller deals instead, a shake-out of top management and a reboot of the drug pipeline. AstraZeneca’s problems are not exceptional, but its patent expiries are larger and longer-lasting than at competitors such as British peer GlaxoSmithKline plc (ADR) (NYSE:GSK).
His objective of “attaining scientific leadership” may go amiss on the kind of hard financial goals that some investors would like, but it has flourished with many younger researchers who felt the group was wafting, following past R&D retardation. It has already boosted work on many potential cancer drugs.
Dan Mahony, a fund manager at Polar Capital, who has raised his stake in the company in the past year, said that when talks to people in the industry about AstraZeneca, a place where people now want to go and work, it has not been true for almost 10 or 15 years.
Roche, mainly its Genentech biotech unit, which Soriot used to head, is well-known for its R&D successes, which is what Soriot expects to imitate with a $500 million move of AstraZeneca operations to Cambridge, a British science hub. One senior Roche insider said that he see Soriot applying some of the same strategies that Roche adopted, in order to focus on highly inventive products and taking risks. Soriot told Reuters in June that the company would be renovated in next three to four years.
Industry analysts expect that sales and earnings will continue to decline to 2017 or beyond, since top-selling cholesterol fighter Crestor will lose patent cover in 2016 that would be a big hit. AstraZeneca plc (ADR) (NYSE:AZN) shares were up 0.15% to $ 51.85 in premarket. GlaxoSmithKline plc (ADR) (NYSE:GSK) shares in last session closed at $50.48.