AstraZeneca PLC Confirms CEO is Staying Put—For Now
July 17, 2017
By Alex Keown, BioSpace.com Breaking News Staff
LONDON – Shares of AstraZeneca jumped in after-hours trading Friday after AstraZeneca confirmed on late Friday that Pascal Soriot would remain at the helm of the company.
The company was covered in a shroud of uncertainty last week after the Israel-based financial publication Calcalist said Soriot was taking over the reins of Teva Pharmaceuticals , the largest generic drugmaker in the world. Soriot will host a call with investors on July 27, Reuters reported late Friday. That was the first comment in days about Soriot’s tenure with AstraZeneca.
Before the announcement of the earnings call, AstraZeneca had said it would not comment on rumors surrounding Soriot’s reported departure. That silence though came with a big price–about $4 billion in market share. Shares of AstraZeneca are down slightly this morning in premarket trading at $33.73.
Teva also saw a drop in its stock after AstraZeneca confirmed Soriot was remaining. Shares of Teva fell about 4 percent on Friday, dipping from $32.79 to $31.66. Shares are trading at $31.46 in pre-market trading.
As AstraZeneca prepares for its earning call, as well as the anticipated results of its Mystic lung cancer trials, things are reportedly “business as usual” at the company. Unnamed AstraZeneca insiders told The Street that day-to-day business has not seemed to have changed at the company.
While AstraZeneca’s note about Soriot hosting the July 27 conference call confirmed he is still the CEO, it does not put an end to any rumor that he was a serious candidate for that position at Teva and thinking of departing the company before the pivotal Mystic results are revealed. The Phase III lung cancer trial assesses progression free survival and overall survival endpoints in patients with PDL1-expressing tumors for both durvalumab monotherapy and the combination of durva + treme, as well as in ‘all comers’ for the combination of durva + treme, versus standard of care chemotherapy. If the readouts are significantly positive, analysts have suggested the treatment could be worth an estimated $2.5 billion in annual revenue.
The trial is a key for AstraZeneca and its pipeline. Since staving off a takeover from Pfizer , Soriot pledged to turn AstraZeneca into a company with $45 billion in annual revenue by 2023. So far AstraZeneca has struggled to rise to the challenge. Writing in Endpoints, John Carroll pointed to several recent AstraZeneca setbacks, including last year’s failure the Phase III combination drug of selumetinib and docetaxel chemotherapy in treating lung cancer.
Earlier this year, the company said revenue will likely decline in 2017 due to generic challenges, particularly as generic drugs eat into the market share of its blockbuster anti-cholesterol drug Crestor. For example, AstraZeneca said sales of schizophrenia drug Seroquel XR were down 83 percent in the United States and 37 percent in Europe. COPD drug Symbicort saw a decline of 21 percent in the United States, which AstraZeneca said was in line with predictions for 2017. AstraZeneca has been in the process of selling off several drugs, particularly as some of them face revenue challenges from the loss of patents or rival generic drugs.
Things are also rough at Israel-based Teva. The company is also facing revenue challenges and remains without a chief executive. Teva continues to hunt for its new chief executive officer. Citing Chaim Hurvitz, one of the largest Teva shareholders, The Times of Israel said the company is expected to name its new CEO within the next few months. Teva has been on the hunt for a new CEO since February after CEO Erez Vigodman abruptly left his position after serving three years in that role.