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AstraZeneca's silence on CEO helps wipe out £3b
[LONDON] Uncertainty over the future of AstraZeneca Chief Executive Pascal Soriot drove the Anglo-Swedish drugmaker's shares lower again on Friday, taking the cost of two days of silence to more than £3 billion (S$5.338 billion).
AstraZeneca has repeatedly declined to comment on an Israeli media report on Wednesday that said the well-regarded Mr Soriot was in talks to join Israel's Teva Pharmaceutical Industries, the world's biggest generic drugmaker.
AstraZeneca shares closed 3.5 per cent lower on Thursday and were down 2.5 per cent on Friday at a two-month low after the company said it would not comment on rumours or speculation. One top 20 shareholder said there had been a "newsflow vacuum".
"It's hard because companies cannot be seen to be responding to every newspaper article because once you start you cannot stop. But as we all agree, if true, then timing is'interesting'," the shareholder said, on condition of anonymity.
The fall in shares since Wednesday has wiped £3.2 billion off AstraZeneca's market value, leaving it at £62 billion.
Moving to a generics drugmaker would be a big change in direction for French-born Soriot, 58, who had made research-based pharmaceuticals his whole drive at AstraZeneca.
The timing of the report has alarmed investors, coming as the company waits for all-important data from a lung cancer drug trial which is seen as a game-changer for Astra.
The company is hoping to secure a substantial slice of a multibillion-dollar market by proving its combination of two immunotherapy drugs, durvalumab and tremelimumab, can help previously untreated patients with advanced lung cancer.
The eagerly awaited results of the major trial, called Mystic, are due any day now.
Analysts at Leerink, an investment bank that specialises in healthcare, said Soriot's exit would come as a major surprise, if true, and leave AstraZeneca rudderless at a key time.
"We spoke with the company, who simply stated that it does not comment on rumours; however it did not outright deny the report," they said.
"If true, the optics around his departure would be terrible ahead of the Mystic readout."
AstraZeneca has already been shaken by the departure of the head of its European business, Luke Miels, whose defection to rival GlaxoSmithKline was a blow, and there have been a number of other senior management departures.
During his five years at AstraZeneca, Mr Soriot successfully defended the company against a US$118 billion takeover approach from Pfizer.
He also rebuilt AstraZeneca's drugs pipeline through research and acquisitions to replace revenue lost from a wave of patent expiries on many of its blockbuster medicines.
The Israeli Calcalist financial news website said Mr Soriot had met Teva's search committee and its chairman to express his agreement to serve as its next CEO.
It said he was expected to earn twice as much as former boss Erez Vigodman and receive a signing bonus estimated at about US$20 million. It said the financial terms were still being discussed.