AstraZeneca’s Soriot Teva switch scotched
The rumours, beginning with a report by Israeli newspaper Calcalist, had suggested that Pascal Soriot, CEO of AstraZeneca, appeared to be very close to agreeing a move to the beleaguered generics maker, Teva. AstraZeneca has finally released news to clarify that Soriot will be around in a few weeks’ time to discuss the release of its financial results, effectively kyboshing the speculation.
It took AZ two days before they addressed the news, causing more than a little panic amongst investors, as £3 billion was wiped off the price of its shares in reaction the news. The timing of Soriot’s potential departure sparked serious concerns about the outcome of the Mystic trial – with many seeing this as suggestive that the news would not be positive.
The company has seen shares bounce back by 4.6% after the company confirmed that Soriot would discuss financial results on 27 July with shareholders. Quite why the company allowed the rumours to swirl for two days is open to question, with the official company line maintaining that it does not comment on speculation.
The phrase no smoke without fire comes to mind but the news that Soriot is set to stay has certainly burned Teva significantly; the company’s shares are down 4% and they are now stuck in the same situation they were previously, looking for an experienced CEO to turnaround its struggling business. It will no doubt find it even more difficult to source a new head for its operations after this latest media drama.
Now that the dust has settled, it leaves both companies in an ‘as you were’ situation, both waiting on a significant announcement. For Teva, it is still the wait for its new CEO, with more time passing the pressure to make an appointment will only increase, and for AZ, it is the Mystic trial results.
One of the reasons the report had seemed somewhat plausible, and particularly worrying for investors, were the noises Soriot had made recently about the Mystic trial. In an interview with the Financial Times, he had said that AZ had more to offer than the trial results and that people would see this when “we’re on the other side”.
It did not strike a note of particular confidence and led to speculation that he may have been ducking out of the company to Teva to avoid the fallout. However, the results are expected any day now that will confirm the speculation on the results one way or another, with Soriot now certain to steer the company regardless of the outcome.
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