AstraZeneca tapped a big pharma executive with experience integrating a biotech company and making deals when it named Pascal Soriot its new CEO earlier today.
Soriot, 53, will join AZ on Oct. 1 as CEO and as an executive director of the company’s board. He had been CEO of Roche’s pharmaceutical division, whose CHF 32.8 billion ($34.3 billion) in annual revenue last year exceeded AZ’s total 2011 revenue of about $33.6 billion.
At Roche, Soriot successfully combined its drug development with that of Genentech—of which he had been CEO—in the year-plus since the Swiss pharma giant snapped up the U.S. biotech for $20.1 billion. AZ, the U.K.’s second-largest drug developer, had hoped to realize similar success when it bought its own U.S. biotech, MedImmune, in 2007 for $15.6 billion and repositioned that company into the center of its biologic drug operations, with an expansion of its facilities in its home state of Maryland.
While Genentech has had several pipeline successes before and since its Roche acquisition, the same cannot be said for AZ. It has struggled in recent years to recover from several late-stage setbacks with experimental medicines the company had counted on to make up for sales revenues it is set to lose due to the “patent cliff” expiration of several brand-name drugs. Those drugs, which include Nexium and Seroquel, now account for 44% of AZ sales, but are set to lose patent protection between this year and the end of 2014.
In the most recent setback earlier this month, AZ and partner BTG halted development of the experimental drug AZD9773 or CytoFab™ for severe sepsis and/or septic shock, following its failure in a Phase IIb trial. CytoFab had been projected to generate £1 billion ($1.6 billion) in annual sales for AZ had it worked.
AZ’s shrinking drug pipeline was a key factor in the sudden resignation in April of CEO David Brennan, amid news reports he was pushed out. Brennan’s interim successor, Simon Lowth, will return to his previous position as CFO while continuing as an executive director on the company’s board.
On Feb. 2, AZ announced plans for 2,200 R&D layoffs as part of a larger reduction of 7,300 jobs. In the months before and since, the company has worked to replenish its pipeline through deals. Last month it launched collaborations with Bristol-Myers Squibb for development and commercialization of Amylin Pharmaceuticals' portfolio of products, in return for AZ paying BMS about $3.4 billion cash. The arrangement was part of BMS’ $7 billion acquisition of Amylin, a deal completed Aug. 8.
"No one is blind to the challenges that confront the pharmaceutical sector and this company, but the underlying strengths of AstraZeneca in delivering on its strategy are clear," Soriot said in the statement announcing his hiring.