New CEO has work cut out as AstraZeneca sales fall

Thu Oct 25, 2012 9:58am EDT
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By Ben Hirschler

LONDON (Reuters) - AstraZeneca's sales slumped by a bigger-than-expected 19 percent in the third quarter, underscoring the challenges confronting the drugmaker's new chief executive, Pascal Soriot.

Faced with patent expires on once best-selling medicines and a thin pipeline of new drugs, the former Roche executive, who joined on October 1, needs to re-focus operations and step up the hunt for acquisitions, analysts believe.

Soriot told reporters on Thursday that buying in products would be an important way of rebuilding the pipeline, adding there was also scope for the recently launched heart drug Brilinta to do "far better".

"One of the critical things we need to do in the mid-term is to bolster our pipeline and that will rely on business development activities, there is no question about it," he said.

In his first day in office, Soriot suspended the group's share buyback program, giving him increased financial flexibility as the group undergoes a strategy review that Soriot confirmed would be presented to investors at the end of January.

Soriot said innovation would remain core to operations and his priority was to "restore the company to growth and scientific leadership" at a time when some rivals are embracing increased diversification.

In the search for promising new drugs, bankers believe AstraZeneca may look at potential acquisitions ranging from small and mid-sized biotech firms to specialty pharma companies like Forest Laboratories and Shire.

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AstraZeneca Chief Executive Pascal Soriot poses for a photograph in this undated handout photograph released in London October 24, 2012. AstraZeneca's new chief executive, Pascal Soriot, has his work cut out to turn around Britain's second-biggest drugmaker, which is struggling with a slump in medicine sales as patents expire. REUTERS/AstraZeneca/Handout