A change artist takes the lead - and spotlight - at troubled AstraZeneca
Name: Pascal Soriot
Title: CEO, AstraZeneca
Want to be the center of attention, with an audience divided among the desperate, the skeptical and the gleefully critical, with a few stubborn hopefuls scattered in the crowd? Then step into the top job at a troubled drugmaker. That's exactly what AstraZeneca ($AZN) CEO Pascal Soriot faces as he puts the finishing brush strokes on a new strategy.
But being in the hot seat comes with its own power. The pharma industry is watching Soriot, ready to move when he does. Small companies looking for licensing partners, investment bankers ginning up M&A, peers competing for the same deals and markets and doctors and patients--they will all respond somehow to AstraZeneca's new direction.
Already, Soriot has made some big moves. His first day on the job, he suspended the company's multibillion-dollar stock repurchase plan, to keep AstraZeneca's options open, he said. Translation, according to analysts and industry types: To preserve cash for deals. The company's shares fell on the news. Companies for sale--and their financial advisers--came knocking.
Then, in January, Soriot revamped his management team, sweeping out two top executives, R&D chief Martin Mackay and commercial Executive Vice President Tony Zook. The two were known quantities, on the record about everything from licensing preferences to payer-persuasion and reimbursements. Suddenly, the rest of the industry had to recalibrate.
Would Mackay's strategy talk at the J.P. Morgan Healthcare Conference still hold true under Soriot's triumvirate of R&D executives? Would late-stage development chief Briggs Morrison weed out his portfolio? What would Paul Hudson and Ruud Dobber do to turn around the laggard blood thinner Brilique/Brilinta, given Zook's apparent failure--and Soriot's stated commitment to the brand? How would Mark Mallon amp up AstraZeneca's push into emerging markets--and would the company's emerging markets rivals need to respond?
Perhaps the most immediate indicator will be Soriot's dealmaking approach. His predecessor, David Brennan, categorically ruled out big mergers. Soriot doesn't. A "transformative" merger is a possibility, he said as AstraZeneca released its 2012 results. Analysts have put forward a variety of big targets, including Forest Laboratories and Shire ($SHPG).
Smaller, bolt-on deals are most likely, as Soriot looks to buy in a pipeline that can eventually fill his company's patent-cliff losses, which are far from over. Where Soriot will be shopping, and for what, remains to be seen. Wherever AstraZeneca looks now, others may as well. Prices may tick upward, given AstraZeneca's obvious needs. And it goes without saying that Soriot's audience will be watching.