Shakeup in AstraZeneca as CEO Brennan quits after six years
LONDON - Shareholder activism led to pharmaceutical major AstraZeneca's chief executive David Brennan abruptly stepping down on Thursday after more than six years in the post.
The company's executive director and chief financial officer Simon Lowth will act as interim chief executive from June 1 until a permanent successor is found, the company announced.
News of the boardroom coup led to the company shares falling 150,00p, or 5.28 per cent, at 2,691.00p.
The shareholders had been calling for a radical shakeup of the group's top management amid growing concerns over the company's prospects after a series of drug development setbacks which hit the profits.
Brennan's decision to quit comes as the company has had to lower its full-year profit expectations following a 38 per cent dive in pre-tax profits to 1.3 billion pounds in the first three months of the year. Revenues fell 11 per cent to 4.5 billion pounds.
The UK's second largest pharmaceuticals company recently lost the patent cover on its top-selling anti-psychotic treatment drug Seroquel. In the case of another ovarian cancer drug known as olaparib on which the company was working, there has been a setback with tests giving negative results..
AstraZeneca said the loss of exclusivity on a series of key brands including the Seroquel patent accounted for eight percentage points out of the 11 per cent revenue drop.
The setbacks in efforts to produce new blockbuster treatments had led to concerns over the future prospects with relatively few candidates to replace its existing stable of drugs.
Announcing his retirement, Brennan said: "After more than six years as chief executive 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."
News of the boardroom coup came just hours before the company's annual shareholder meeting.
The chairman-designate, former Volvo boss Leif Johansson, will take over from Louis Schweitzer, three months earlier than planned, and will lead the hunt for a permanent successor to Brennan.
Both Brennan and Schweitzer were reportedly encouraged to retire earlier than planned by non-executive directors on the board.
The company said his severance arrangements had not been agreed. Brennan was paid more than 9 million pounds last year.
City analysts expect even more deal making under the new leadership, with fresh talk that AstraZeneca could snap up its partner, Forecast Laboratories.
"We're navigating a difficult period with patent expiration," said Lowth, adding that the next two quarters would be even tougher.
Many of AstraZeneca's bestselling products have come off patent and face competition from cheaper alternatives. Besides Seroquel, the company is likely to lose patent for heartburn pill Nexium and heart drug Crestor in 2014 and 2016 respectively.
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