AstraZeneca’s CEO set for shock switch to Teva
It is no secret that Teva has been on the lookout for a new CEO and they had already been quoted to say that they “looking around the world for the best candidate”, yet its swoop for AstraZeneca’s Pascal Soriot has still come as a shock to the pharma industry.
The news was broken by Iraeli newspaper, Calcalist, and there are enough details that have emerged to make it seem like the deal may well have already been agreed. Soriot has apparently already met with Teva’s chairman and the search committee, with the current AZ CEO thought to have agreed a deal to make the move.
The switch is a surprise for a number of reasons, not least because Soriot has not achieved his promises to completely turnaround the business when he rejected a takeover bid from Pfizer. He has been at the helm of AZ for five years and promised to raise sales to $45 billion by 2023, in a bid to stave off Pfizer’s advances. The figure became increasingly unlikely, as the company struggles with patent cliffs and a shaky pipeline to stymy the loss.
Perhaps most worryingly for those concerned with AZ, it sends out worrying signals about the results of the long-awaited Mystic trial. The study is looking into the potential combination of durvalumab, its PD-L1 drug, and tremelimumab, a CTLA4 therapy, with many hopes for the company pinned on this providing a winning combination to rival current market leaders, Keytruda and Opdivo.
The question that will be on many lips now is: if the results were looking good in the trial, why would Soriot choose to jump ship at this point?
The financial details that have emerged regarding his move to Teva offer some clues – as he will become the most well-paid CEO in Teva’s history, earning double the salary his predecessor, Erez Vigoman, received. On top of that, he looks set to receive a signing bonus of $20 million.
However, there is no doubt that he is moving to another challenging role at Teva. The company seems to have spent the last year firefighting rather than progressing, as it churned through another CEO in Vigodman, after his leadership was not deemed satisfactory, and it struggles to deal with the overall pressure being placed on the generics drug market.
It is a role not for the light-hearted but Soriot clearly has confidence in his own judgement. Whether investors in AZ will retain such confidence in his ability is open to question, with many surely rueing his decision to reject Pfizer previous advances.
As yet, both company involved has not officially commented on the news and it seems unlikely that more details will emerge until the agreement is official. Where AZ will find its own replacement CEO becomes the next question that needs to be answered due to this revelation.
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