ASTRAZENECA chief executive David Brennan will retire from his post, ending a six-year tenure, after repeated failures in drug development left investors sceptical of the company’s earnings prospects. Simon Lowth, the chief financial officer, will serve as interim chief executive until a replacement is chosen, the London-based company said yesterday in a statement.
AstraZeneca cut its profit forecast for the year, after first-quarter revenue sank on “challenging market conditions” and the loss of patent protection on several medicines.
The news came as AstraZeneca reported a drop of almost 40 per cent in first-quarter pre-tax profit to $2.05 billion – missing consensus forecasts of $2.6 billion – as competition from generic rivals cut into its profitability. It cut core earnings per share targets for the year to $5.85-$6.15 from a previously stated $6.00-$6.30.
Mr Brennan insisted the decision was his own, and told a press briefing: “I just felt the time was about right to pass the reins on to a new leader.” He said he planned to spend more time with his family and “to figure out ways to influence [healthcare] from a different position.”
He and Mr Lowth stressed their commitment to AstraZeneca’s existing strategy, which rejects diversification away from patented drugs or large-scale acquisitions, while opening the possibility of a shift given an annual board review with the new chairman in the second half of the year.
Speculation mounted in March that Mr Brennan (58) would leave the job after the company nominated a new chairman. He steps down after AstraZeneca cut thousands of jobs, boosted dividends and bought back billions of dollars in shares.
Sales growth slowed after patent protection was lost on medicines including Arimidex and Casodex for cancer, and the company didn’t bring enough new products to market.
Andrew Baum, an analyst at Citigroup, said in March that the appointment of Leif Johansson as chairman “would create the kind of board stability needed for management change” at AstraZeneca, Britain’s second-biggest drugmaker after GlaxoSmithKline. – (Copyright The Financial Times Limited 2012 / Bloomberg)
