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Last week, AstraZeneca's CEO Pascal Soriot was rumored to be preparing for a move to run Teva Pharmaceutical Industries. This week, he's rumored to be staying put. Scrip takes a look at the key moments in his tenure at the UK big pharma, and the progress on targets.

 

HOW IS SORIOT DOING IN YEAR 5 AT ASTRAZENECA

Rumors swirl around AstraZeneca PLC's CEO of five years, Pascal Soriot. The company's market capitalization slipped by £2.45bn (-3.7%) on Thursday and Friday last week amid claims he was preparing to join Teva Pharmaceutical Industries Ltd., which has been hunting for a CEO since February. Over the weekend, AstraZeneca said Soriot would be presenting the company's quarterly results on 27 July and speculation switched to the likelihood that Soriot will stay at AZ, sending Teva's shares into a 3.1% decline. Scrip takes a look at the track record of the man who can cause so much market turbulence.

 

Brought in to run the UK big pharma in 2012 after his predecessor David Brennan was squeezed into retirement, Soriot launched a restructuring program to simplify the company's business, consolidate its R&D activities into three flagship sites, and focus on a narrower range of therapeutic areas. He was then thrust into a public battle with Pfizer Inc.'s Ian Read, succeeding in fending off a takeover bid from the US giant in 2014.

 

AstraZeneca's share price has risen by 70% since Soriot took the helm, with the company's market capitalization reaching around £65bn ($85bn) before the Teva rumors surfaced on July 12. (Also see "Will Soriot Ditch AstraZeneca In Favor Of Teva… And A $20m Bonus?" - Scrip, 13 Jul, 2017.) However, this still falls short of the $119bn Pfizer had put on the table for the company.

 

In his campaign to fend off the hostile takeover, Soriot made a number of growth forecasts for AstraZeneca based on his existing 2013 turnaround plan and newly scoped details. The table below revisits those targets and assesses the progress made over the past three years. (Also see " 5 promises AstraZeneca must keep now Pfizer's gone " - Scrip, 28 May, 2014.)

 

 

Pledge

Progress

2017 broadly in line with 2013 revenues ($25.7bn)

Missing target. Q1 revenues $5.4bn; company predicts full-year revenue decline in low to mid-single digits, from 2016 revenues of $23bn.

Return to growth after 2017

Challenging, as 29% of 2016 sales ($6.2bn) came from three major products suffering recent generic competition –Nexium,CrestorandSeroquel XR.

2023 revenues of $45bn

Datamonitor Healthcare's February 2017 forecast predicts AZ sales will be $25.6bn in 2023. Others are more generous, but it is hard to see revenues reaching much more than $30bn in six years' time without significant M&A activity.

Peak revenues for Brilinta: $3.5bn

Target dropped. In October 2016 AZ said the $3.5bn target was no longer attainable afterBrilintafailed to beat older blood thinner clopidogrel in peripheral artery disease or aspirin in stroke. 2016 sales were $839m.

Peak revenues from diabetes franchise: $8bn

Sales of key diabetes brands (Farxiga,Onglyza,Bydureon,Byetta) were $2.4bn in 2016. Diabetes is a highly competitive market with significant price pressures. Ambitious target.

Peak revenues from respiratory: $8bn

Challenging. 2016 respiratory sales fell by 5% to $4.8bn. BlockbustersPulmicortandSymbicortface generic headwinds and while acquired products like Almirall'sDuaklirand Takeda'sDalirespare set to grow, they are not going to reach the same heights. A lot is riding on pipeline candidates like benralizumab and tralokinumab. Deutsche Bank sees 2022 respiratory sales of $5.7bn.

Peak revenues from durvalumab (Imfinzi) and combos: $6.5bn

Expected to grow well, but with Deutsche Bank predicting $2.4bn by 2022, AZ's target looks high. Still, Société Générale believes immuno-oncology sales could reach $5.4bn in 2022.

Peak revenues from Lynparza: $2bn

Launched in late 2014 (EU) and early 2015 (US),Lynparzais indicated for ovarian cancer and being studied in cancers including breast, prostate, pancreatic, gastric. It achieved sales of $218m in 2017. Deutsche Bank predicts sales will reach $1.2bn by 2022, Société Générale thinks it could reach $1.6bn by then. AZ target looks ambitious.

Deliver at least 10 new products between 2013 and 2020

On track. Products approved since 2013 include: Farxiga (first US approval 2014, although it was approved in the EU in 2012),Epanova(from Omthera acquisition),Xigduo(combo of Farxiga and metformin), Lynparza,Avycaz,Tagrisso,Bevespi Aerosphere,Qtern(combo of Farxiga and Onglyza),Imfinzi(durvalumab). There are 12 new molecular entities in the late-stage pipeline. Recent setbacks include a complete response letter from the FDA for ZS-9 and a Phase III miss for tralokinumab.

Divest non-core products

Numerous deals have been signed to divest non-core products.

 

AstraZeneca Under Soriot: Key Moments

  • October 2012 – Pascal Claude Roland Soriot quits as chief operating officer of Roche's pharma division to lead AstraZeneca following the departure under duress of AZ's previous CEO, David Brennan, in April 2012

  • 2013 Marc Dunoyer promoted to CFO, replacing Simon Lowth, who had acted as interim CEO after Brennan left

  • 2013 – Restructuring and consolidation plans include job cuts and concentration of R&D in three locations in US, UK and Sweden. Decision to focus on three therapeutic areas: respiratory, inflammation & autoimmunity; cardiovascular & metabolic; and oncology

  • 2013 Acquires Pearl Therapeutics for $1.15bn (respiratory)

  • 2013 agrees to buy BMS's share of diabetes partnership

  • 2013 acquires Omthera Pharmaceuticals for $443m (cardiovascular)

  • 2014 AZ rejects final $119bn bid from Pfizer (following initial bid of $99bn)

  • 2014 deals include purchase of Almirall's respiratory business for $2.1bn

  • 2014 Completes the buy-out of the BMS/AZ diabetes partnership

  • 2015 acquires Actavis's branded respiratory drugs in North America for $600m up front. Later it buys Takeda's respiratory portfolio for $575m.

  • 2015 Acquires ZS Pharma for $2.7bn (cardiovascular)

  • 2015 Takes majority stake in Acerta for $4bn (oncology)

  • 2016 FDA issues CRL for ZS-9

  • 2016 MEK1/2 inhibitor selumetinib fails Phase III trial in NSCLC

  • 2016 Brilinta fails to show a benefit over clopidogrel in peripheral arterial disease, failing the EUCLID trial

  • 2017 In May the lung cancer results for Imfinzi in the PACIFIC trial are positive

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