AstraZeneca’s shares may have fallen by as much as 6.3% following news of David Brennan’s imminent departure — the biggest intraday decline since December 17, 2010, said Bloomberg — but analysts welcomed his retirement as a good thing. “This will be received positively,” said WestLB’s Mark Belsey. “It’s time for someone to reinvigorate the pipeline.”
With a 38% drop in profits, the Seroquel defeat, the upcoming loss of Nexium’s patent protection, and slim pickings from 2007’s $15 billion MedImmune acquisition, there is no shortage of reasons for Brennan’s six-year tenure to come to an abrupt end, although the news was positioned by AZ more as a selfless bowing out to make room for new blood and new strategies. Chief Financial Officer Simon Lowth takes the leadership reins for the time being (and incoming Chairman Leif Johansson’s start date has been expedited to June 1) but whoever is appointed Brennan’s permanent successor will need to hit the ground running.
The best prospects in AZ’s weak pipeline, says the Economist Intelligence Unit’s Ana Nicholls, lie with blood-thinner Brilinta, “but we won’t get a clear view of how that will perform until later this year.” Others analysts have suggested that more belt tightening is what’s needed, with Gbola Amusa telling The Telegraph earlier this week that a cut in AZ’s R&D budget of 25 percent “would generate enough funds to make an acquisition worth $13bn.
Speculation on AZ’s first post-Brennan moves will continue to mount, but given its strong cash position it is believed that mid-sized acquisitions are likely to be at the top of the agenda.