So January is here, the month that Pascal Soriot has promised to announce his strategy for AZ. Will be interesting to see how this one goes - Brennan's only move was cuts and closures every 2 to 3yrs and they got rid of him for a reason. Soriot has already stopped the Brennan/Lowth share buy-back strategy so is he going to stop the erosion of R&D too, or are revenues falling too fast now?

I hope the new CEO will be a valued performance

at last, someone who counts fights back. God protect us from the minimum-wage also-rans.

Mm was highly regarded at Pfizer by anyone who actually mattered, contributed or had true ability. The mortgage/401k obsessed confluent monolayer of intellectual cannon fodder decided to start a cowardly war of anonymous snipes against him, rolph etc simply because their own lives had proven they were incapable of competing on a level playing field. Leishmania.

When will Smith be moved on

MM wasn't highly regarded at Pfizer - his in licensing was a joke - just a guy who could remember your name. He seems to be doing better deals at AZ.

mm roundly regarded as a damp squib. No one is sure why there was so much fuss made about him from the pfizer folk. They were correct in one aspect; he knows nothing about drug discovery and seems incapable of contributing anything positive or constructive. He had a reputation as a hitman and yet he seems completely impotent in that regard here. Perhaps he was trying to re-invent himself when he moved but he has proven himself to lack any substance and is clearly in a career cul-de-sac and is now unlikely to go any higher at az. My gut feeling is he is headed for some small biotech - like all these guys, its all about lining your own pockets for retirement. One thing is for sure - no other pharma will touch him.

How will this affect MM?

After another review of R&D expect a decision to reopen Loughborough after buying it back from plastics company (yes taking the p..s)

Pascal Soriot, Roche COO appointed AZ CEO

http://www.telegraph.co.uk/finance/newsbysector/pharmaceuticalsandchemic...

AstraZeneca appoints Roche's Pascal Soriot as new chief
AstraZeneca has appointed Pascal Soriot from rival drugmaker Roche Holding as its new chief executive in one of the most eagerly-awaited appointments within the pharmaceutical industry in years.

Pascal Soriot has been chief operating officer of Roche's pharmaceuticals division since 2010
7:01AM BST 28 Aug 2012
1 Comment
Mr Soriot, a 53-year-old French national, has been chief operating officer of Roche's pharmaceuticals division since 2010. He will take up his new job on October 1.

"I am excited and honoured to have been asked to lead AstraZeneca," Mr Soriot said. "Throughout my career I have had enormous respect for the people of AstraZeneca and what they have achieved. No one is blind to the challenges that confront the pharmaceutical sector and this company, but the underlying strengths of AstraZeneca in delivering on its strategy are clear. AstraZeneca will continue to make a positive difference to patients over the longer term and I'm looking forward to playing my part in shaping that future."

Anglo-Swedish drugmaker AstraZeneca has been without a permanent chief executive since June 1, following the abrupt departure of David Brennan, who was criticised by investors for failing to do enough to shore up the group as a wave of drug patents expired.

AstraZeneca's chief financial officer, Simon Lowth, has acted as interim chief executive and will continue to do so until Mr Soriot arrives.

After that, AstraZeneca said Mr Lowth would resume his duties as finance chief and continue to serve as an executive director, although there is likely to be speculation over how long he will remain, since he was also considered a candidate for chief executive, Reuters reports.

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Britain's second-biggest drugmaker has suffered repeated drug development setbacks, stoking fears about its long-term prospects given loss of exclusivity on key medicines, which exposes the group to generic competition and declining sales.

Roche, by contrast, has had a successful record of drug development and Mr Soriot has been at the centre of that innovation as a former head of Roche's US biotech unit Genentech.

Swiss-based Roche said diagnostics boss Daniel O'Day would take over as head of its dominant pharma division to replace Soriot and Roland Diggelmann, currently head of the Asia-Pacific region in the diagnostics division, would replace O'Day.

Meanwhile, the European Commission has approved Zinforotm for adult patients with serious skin infections. The ruling makes the antibiotic the only approved treatment "with demonstrated clinical efficacy" against MRSA.

When will they reorganize the SET?

Patent cliff reduces AstraZeneca sales

AstraZeneca suffered a sharp fall in revenue in the first half of this year after patents on some of the pharmaceutical group’s most lucrative drugs started to run out.

Revenues tumbled 15 per cent to $14bn in the first half of 2012 as the loss of exclusivity on products such as Seroquel, a drug that combats bipolar depression, hurt the group.

The falls were steepest in the second quarter, when sales fell 18 per cent to $6.7bn over the quarter. The loss of exclusivity on drugs such as Seroquel and also Arimidex, which treats breast cancer, accounted for more than 80 per cent of the drop in revenues.

AstraZeneca, which is the second-largest pharmaceutical group in the UK, has a larger patent cliff than its rivals, with approximately half of its $33bn in annual revenue expected to disappear by 2016 as the patents on some of its most successful products come to an end. Another drug in this category is Nexium, which relieves heartburn.

Seroquel alone accounted for 80 per cent of the group’s decline in US revenues, which sank 29 per cent in the second quarter to $2.3bn. Overall, profit before tax fell 36 per cent to $3.8bn in the first half of 2012.

Simon Lowth, interim chief executive, said: “As we expected, the loss of exclusivity on some key brands and tough market conditions have resulted in a decline in revenue and earnings in the second quarter.”

However, Mr Lowth said that the group was “on track” to meet the financial targets for the year.

Diluted earnings per share fell 29.2 per cent to $2.55. The group’s core earnings per share benefited from a one-off tax settlement gain worth $240m, without which the company would have struggled to maintain its guidance for the year, according to analysts.

“[The results are] actually an underlying guidance downgrade in our eyes,” said Alistair Campbell, an analyst at Berenberg Bank.

Overall, tax settlements left the group with an effective tax rate of 14.6 per cent for the first half of 2012. Core gross margins declined, falling 1.9 percentage points to 81 per cent in the first half.

Shares in the group have fallen 6.8 per cent in the previous 12 months, lagging behind its rivals such as GlaxoSmithKline, whose shares have risen 4.2 per cent over the same period.

Former chief executive David Brennan resigned earlier this year after pressure from shareholders over the group’s sluggish performance and impending patent cliff, receiving a pay-out worth £4.5m.

hope so we do

Brilliant will save the day

with Brennan out of the picture it didn't take long for MedImmune's 'invincibility cloak' to loose it's powers!

AZN to Restructure Operations
By Zacks Equity Research | Zacks – Wed, Jul 18, 2012 2:45 PM

AstraZeneca PLC’s (AZN) global biologics division, MedImmune, is set to streamline its infectious disease and vaccines research, development and operations. As part of the restructuring, AstraZeneca is closing its California sites at Mountain View and Santa Clara. However, the company will keep its site at Hayward operational.

As a result of the restructuring, AstraZeneca expects that 300 positions will be impacted of which 100 will be shifted to the company’s other sites including Hayward. This operation is expected to be over in 2014.

AstraZeneca believes that the changes will help in innovation across its therapeutics areas and also aid product development. This will also result in reduction of fixed cost associated with the sites. The company reaffirmed its commitment to infectious diseases and vaccines research and development, mentioning that the changes will not affect the supply of vaccines.

Our Take

AstraZeneca is on the back foot due to generic competition faced by its many of its drugs. Arimidex, Toprol-XL, Seroquel IR and Merrem are already facing generic competition in the US. Additionally, Nexium generics are expected in the US in 2014. Generic competition was primarily responsible for the $2 billion loss of revenues in 2011.

Moreover, AstraZeneca’s drugs operate in a highly competitive environment. AstraZeneca’s lead drug, Crestor, primarily competes with Pfizer Inc.’s (PFE) Lipitor and Merck & Co. Inc.’s (MRK) Zocor/Vytorin. Nexium competes with Pfizer’s Protonix. The company is looking to drive the bottom-line through cost-cutting initiatives and share buybacks.

We currently have a Neutral recommendation on AstraZeneca. The stock carries a Zacks #3 Rank (Hold rating) in the short term.

A circus ring leader should be the next CEO.
The stategy should be to tame senior management into line, they havent got a clue.
Else, go bust, no one in right mind will merge or take over AZ.
Good luck all

Who should run AZ?
Fingers crossed they go for, and get, Art Levinson (Apple chairman and ex Genentech CEO who came up via R&D) - the future would definitely look brighter if they pulled that off!

http://www.forbes.com/sites/matthewherper/2012/04/29/who-should-run-astr...
Who Should Run AstraZeneca?

AstraZeneca chief executive David Brennan announced on Thursday that he would retire in June, just as earnings dropped. He departs, in the words of Bernstein analyst Tim Anderson, “at the exact moment that the financial wheels seem to be falling off.” Nexium (heartburn) and Seroquel (mental illness) are now losing patent protection; the big-selling cholesterol drug Crestor follows in 2016.

As I explain in the video below, AstraZeneca’s board of directors should look for an outsider to replace him, ideally someone from the biotechnology sector. A similar strategy — bringing George Scangos from the tiny biotech Exelixis — has worked for Biogen Idec. If former Genentech chief executive and current Apple Chairman Art Levinson could be enticed to take the reins, AstraZeneca stock would jump. The board should consider executives who have successfully run small, innovative companies, like Peter Hirth, the CEO of Plexxikon, which is a unit of Daiichi Sankyo, or David Mott, who was chief executive of biotech firm MedImmune until it was acquired by Astra. Want a big pharma candidate? Try Jörg Reinhardt, who was one of the top executives at Novartis as it had one of the best runs of new drug approvals ever and is now chief executive of Bayer Healthcare. The drug industry’s most well-known turnaround artist, Fred Hassan (see Pharmacia, Schering-Plough) is chairman of Bausch + Lomb and may not be interested in another chief executive job. Matt Emmens, the former chief executive of Vertex Pharmaceuticals and Shire PLC, likewise seems keen to slow down after running two important companies. But AstraZeneca really needs someone who is going to shake things up and change direction.

AstraZeneca is one of the few big pharmaceutical firms where a mega-merger might make sense — depending on who wants to do the deal.

Very brave, honest and insightful posting @10.21 from an apparent AZer.

Many of us were shown the exit signs in the last round.

Some decided that it wasn't their stop; some tentatively stepped through the doors, eyes wide on the platform; some of us ran like the wind, vaulting the barriers, not looking back.

Spot on @10.21 couldn't describe our situation better myself

Very good post @10.21 summarising the AZ situation

Agreed, a very insightful summary. It also can be used with a few name or product changes for any number of the "great" biotechs that have embraced a downward spiral of their own belief system and mutual self congratulation.

Very good post @10.21 summarising the AZ situation.
I wish you all good luck in the years ahead and hope for the sake of the UK pharma industry that AZ can pull off what looks like mission impossible

A surviving UK Pfizerite

merger with GSK is a complete non-starter. GSK CEO Andrew Witty has repeatedly said he has no interest in AZ.

http://www.pharmafield.co.uk/be/post/2012/05/04/GSK-rules-out-AZ-move.aspx

GSK rules out AZ move
By IainBate4. May 2012 12:18
GSK Chief Executive Sir Andrew Witty has ruled out a takeover bid for AstraZeneca.

Sir Andrew told shareholders at the company’s annual general meeting yesterday not to expect any major takeovers in the future as GSK focuses on the potential of its pipeline.

In response to a question over a possible merger, Sir Andrew said a deal for AZ would be “very distracting” at a time when experimental drugs in its pipeline are entering an exciting period.

The future of AstraZeneca remains uncertain as the company battles against generic competition, setbacks in drug development and the loss of its CEO David Brennan after he retires on June 1.

Revenue was down by 8% in the first three months of this year at AZ with sales in the US, Western Europe, Established Rest of the World and Emerging Rest of the World all falling.

David Brennan announced his retirement to coincide with the publication of the Q1 results after admitting that the pharmaceutical sector is “experiencing pressures none of which I’ve witnessed in my 36 years in the industry”.

AZ shareholders had criticised his leadership in recent years after the company had failed to compensate for the loss of revenue with mergers and acquisitions.

As a result, industry analysts have speculated that AZ may become a takeover target for one of pharma’s biggest companies.

A merger of GSK and AZ, the two largest pharma companies in the UK, would provide big cost savings. It led one GSK shareholder to raise the issue with the Chief Executive claiming it would be more effective than the recent $2.6bn offer for Human Genome Sciences.

Sir Andrew said GSK believes it can “deliver an extraordinary return to shareholders through this acquisition. I think we waited until exactly the right moment to make this offer, but nonetheless this is a compelling offer for shareholders at HGS to consider,” he said.

The $13 per share offer was rejected by HGS – who have now instructed Goldman Sachs and Credit Suisse to help explore strategic alternatives to GSK’s bid. Sir Andrew declined to comment on whether he had made contact with HGS’ management since GSK’s offer was rejected.

assuming no major product launches with immediate blockbuster status within the next four years (reasonable assumption), the income by 2016-2017 will only be enough to support a company of approx 35000 to 40000 worldwide (which will then decline sharply). So, whoever the new ceo is, they only have to look at the pfizer story to see the possible factors/scenarios.

1. Merger - but with whom? I don't buy the much speculated GSK get-together. We don't bring enough to the table and would only weaken GSK - their shareholders would not go for it.

2. Hostile on AZ - again, by whom and for what? If you buy something, buy it because you need it. We have nothing anyone needs so we are not even a target for asset stripping.

3. Selective purchase of smaller pharma/biotechs - likely, but we don't have endless cash and will need a lot of it for the thousands of 'adios-amigo' packages required to downsize within the next 5 years. And, in case anyone hadn't noticed, our track record in this area is not great - precisely what has medimmune contributed. Further, the few companies who may have a promising pipeline are already being eyed up by pfizer (and others) with their greater cash reserves.

4. Purchasing/licensing of development candidates. Fine, get on with it. But we need them on the market by 2016 so they need to be late stage with evidence of efficacy - which means yet again, we need to compete with the other big boys.

5. Invest in Asia/Brazil - so we transfer some R&D in return for market access. Great, so research is cheaper and we continue to be non-productive for half the cost. And what are we going to sell in this market - Crestor? What makes us think anyone (government or individual) is going to pay for crestor when generic simvastatin will be available for around 1/20th of the cost? And in any case, generic rosuvastatin will also be available.

the inconvenient truth is that we are not too big to fail. The market simply cannot support GSK, AZ, Pfizer, BMS etc - at least one will have to go and we are the prime candidate to be first down the tube. Any ceo will have to manage our decline - they need to be a hitman (MM anyone? that is all he did at pfizer). Our demise is largely irrelevant to them - they will not be planning beyond their own retirement - 10 years or so. So we should protect ourselves as well - i'm genuinely sorry for those that will get cut over the coming years (myself included) - but its too late to get angry - the damage is done. Every penny spent on pointless robots and unproven technology, every fatuous managerial training course, every six monthly reorganisation, every questionable promotion to management, every copy of 'Who Moved My Cheese', every HR initiative; we wasted time and money copying the mistakes of others. So take a leaf out of Brennans book - screw the company, screw your colleagues, the next 5 years is going to be shit - accept it, line your own pockets as much as you can and, if you get the chance, get out as early as you can. And put behind you the memories of British Leyland Pharmaceuticals.

"Running a business is not rocket science. There really does not need to be a strategy. There is one object and that is to make money. I do not understand why CEOs and CFOs can not understand this simple concept."

I"m sure they understand that but how do you make money with a company that (by 2016) has no products?

Running a business is not rocket science. There really does not need to be a strategy. There is one object and that is to make money. I do not understand why CEOs and CFOs can not understand this simple concept.

Previous salary and benefits package at Pfizer- maybe?

"... he points out that he has brought on 31 of the top 50 managers in R&D from outside developers."

Based on what metric?

The head of R&D thinks that you build the pipeline by bringing in top managers from the outside. Sorry, Sir, but you need good scientists in a creative enviroment to do that! AZ heading for the exit, fast...

AstraZeneca a "train wreck" which "has little going for it"

http://www.fiercepharma.com/story/new-astrazeneca-chairman-looks-ceo/201...

New AstraZeneca chairman looks for CEO
Leif Johansson is well connected but finding a leader for troubled company is no small task
June 1, 2012 | By Eric Palmer

AstraZeneca ($AZN) is on the hunt for a replacement for ex-CEO David Brennan. Leif Johansson, who takes over as chairman today, tells The Financial Times that finding the right leader is his first priority, particularly given that the company must "navigate a period of significant change."

Simon Lowth, who is chief financial officer, is serving as interim CEO. Finding a CEO to tackle AstraZeneca's troubles--it has little in the pipeline to replace the revenue-producing drugs dribbling off patents--is no small task. But Johansson seems well-positioned for it.

AstraZeneca is a mash-up of the Swedish Astra and the British Zeneca and the fact that AstraZeneca named Johansson chairman suggests that the Swedish side of the AstraZeneca house is in ascendancy. Johansson is son of a high-ranking Wallenberg executive, which plays well with many investors since the Swedish company owns a 4% stake, The Financial Times explains. He has significant business experience with appliancemaker Electrolux and the mobile phone company Ericsson, but the Wallenberg family has large investments in both, raising the question of whether family connections were the key to those positions.

He was chief executive of Volvo during a difficult time, even selling off the car side of the business and keeping the more profitable truck line. And he came to AstraZeneca after having served as a non-executive director of Bristol-Myers Squibb ($BMY). That fact doesn't impress one fund manager that The Financial Times spoke with, who calls AstraZeneca a "train wreck" and says there is little to compare between it and Bristol-Myers Squibb. BMS, he points out, had a healthy pipeline and strategically cut its sales operations to focus on selling higher margin drugs to fewer specialists. AstraZeneca, by comparison, has little going for it, which is why Brennan got asked to leave.

The company has been trying. Martin Mackay, the head of R&D, recently laid out his blueprint to The Financial Times, which includes in-licensing more programs, buying small biotechs, partnering with rivals and possibly coming up with a few risk-sharing arrangements with private equity. He claims that after whacking 40% of the projects in the pipeline since his arrival in 2010, AstraZeneca is positioned to execute on new deals. To back his claims, he points out that he has brought on 31 of the top 50 managers in R&D from outside developers.

Whether Mackay's plans and Johansson's connections are enough to right the listing AstraZeneca is yet to be seen. Johansson's pick for CEO will tell the story.

- read the Financial Times story
- see more from The Financial Times

AZ to be bought for its cash and existing products.
All sites to be right-sized ie as an estate agents office for all those biotech incubator type things they don't understand.

It's gone, IMHO

"Jeff" - would this be Kindler, you are referring to? No thanks, we don't want any more ex-pfizer "leaders".

Continue to sell of the failures - obviously quite a boom in New Oops Department. New Oops was the beginning of the end for AZ research. Filled with self seeking yes men and yes women. What happens when the cupboard is bare boys (and girls).

Pharma giants offer up drug candidates for $20M NIH collaboration

Read more: Pharma giants offer up drug candidates for $20M NIH collaboration - FierceBiotech

Jeff who?

I can see them selling off most of their assets and making the majority of their employees redundant and just selling generics.

...how 'bout Jeff?

It's all a big joke
Thanks for this constructive comment to my original post. If you worked or do work for AZ it explains a lot about the state of the company.

its all a big joke!

Option 1, a merger, is not an option: AZ is too unattractive.

Option 2, AZ being taking over by another company, is not an option: they are too unattractive, and too complex for a simple asset stripping exercise.

Option 3, AZ buying multiple smaller or one medium sized companies, is just waste of money: not very many good assets on the market.

Option 4, therefore, is the only viable alternative: adjust the size of AZ according to the expected post patent expiry revenues, assuming that absolutely nothing in the (fairly empty pipeline) will work.

AZ will rightsize, or disappear, or both.

AZ pipeline is poor. If nothing happens quickly share price will fall rapidly making AZ cheap. AZ still has cash in bank and income from products in market. I therefore see a hostile takeover. Whatever more large job losses and definite closure of Swedish site and large reduction at Alderley. There is no time to reestablish the research base too much damage has been done.

Brave move would be to re-establish the necessary critical mass in research, take advantage of faillure to sell Charnwood site possibly as a research centre with AZ and external tenants to fill the space.
After all, the talk of buying drugs in from small biotech or academics drug discovery were just the ramblings of marketing driven leader.

noone will merge with AZ - why would they? AZ only brings costs. Options are hostile take-over and/or rapid contraction......massive job losses either way.

The only big change available is a merger; which of course means more job losses.

Brennans strategy was small bolt on additions this has been rejected otherwise he would not have got the push. Therefore the options must be a large acquisition ( where is the money?) or the new CEO engineers a takeover of AZ by eg GSK (UK government would like this and UK keeps a Pharma global presence) or firesale and liquidate AZ?

mackay? you jest sire. no, no, a thousand times no. why, just ask several thousand ex-pfizer staff.

Mackay?