As it posted disappointing sales and earnings for the first quarter, AstraZeneca has announced that chief executive David Brennan is to retire, amid pressure from disgruntled shareholders.
Mr Brennan (pictured) will be replaced by chief financial officer Simon Lowth from June 1 on an interim basis. It was also revealed that Leif Johansson will succeed Louis Schweitzer as non-executive chairman three months earlier than previously announced, in order to lead the selection process for Mr Brennan’s successor "including both internal and external candidates".
Mr Brennan's decision has come as something of a surprise given that just a week ago, he was reported as saying that he was "plugged in" as boss, despite rumours that a number of major shareholders had questioned whether he was the man to lead the company as it battles to deal with several recent pipeline setbacks. However, he now says that "after more than six years as CEO of this great company, I have decided that now is the right time to step down and allow a new leader to take the reins".
Mr Schweitzer said: “David has led AstraZeneca’s business with skill, integrity and courage during a period of enormous change for the pharmaceutical industry and for the company". He added that "we fully understand and respect David’s decision to retire and thank him for his selfless leadership".
Operating profit down 36%
Mr Brennan is bowing out as the firm's problems were highlighted by financials for the quarter which show that operating profit fell 36% to $2.16 billion and revenue decreased 11% to $7.35 billion, well below analyst estimates.
The cholesterol blockbuster Crestor (rosuvastatin) rose 2% to $1.50 billion, while the asthma combo Symbicort (budesonide and formoterol), slipped 3% to $723 million. Revenues for Nexium (esomeprazole) were down 18% to $953 million and sales of the antiulcerant blockbuster in western Europe decreased 53%, due to generic competition.
The antipsychotic Seroquel (quetiapine) was down 15% to $1.14 billion, while Seroquel IR, which has lost patent protection in the USA falling 25% to $754 million. As for oncology, Arimidex (anastrozole) fell 39% to $144 million, battered by patent expiries, while Casodex (bicalutamide) fell 17% to $113 million. Zoladex (goserelin) brought in $273 million (-1%), while Iressa (gefitinib) climbed 17% to $143 million. Faslodex (fulvestrant) leapt 24% to reach $151 million.
The Onglyza (saxagliptin) diabetes franchise partnered with Bristol-Myers Squibb, brought in $72 million (+106%). However, the recently-launched antiplatelet drug Brilique/Brilinta (ticagrelor) had sales of just $9 million, most of which came from Germany. In the USA, AstraZeneca has just signed a deal with The Medicines Company which will see the firms co-promote Brilinta across the Atlantic.
Mr Brennan said that "the anticipated impact from the loss of exclusivity on several brands, together with challenging market conditions, has made for a difficult start to the year". He added that "delivery on our restructuring plans and continued discipline on operating costs, together with the benefits from a lower tax rate, will only partially mitigate the revenue pressures".
As a result, AstraZeneca has lowered its core earnings per share target for 2012 to $5.85-$6.15 from $6.00-$6.30. The disappointing figures and news of Mr Brennan's departure saw the Anglo-Swedish drugmaker's shares fall, down 5.2% to £26.92 at 10.25am UK time.