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AstraZeneca slumps on report CEO is heading to Teva
July 13, 2017 / 9:14 AM / 2 months ago

AstraZeneca slumps on report CEO is heading to Teva

Chief Executive of AstraZeneca Pascal Soriot leaves after appearing at a commons science committee hearing at Portcullis House in London May 14, 2014. REUTERS/Luke MacGregor

LONDON (Reuters) - Shares in AstraZeneca fell more than 5 percent on Thursday after the company declined to deny a media report that Chief Executive Pascal Soriot was about to defect to Israel-based Teva Pharmaceutical Industries.

Soriot, who has led the Anglo-Swedish company since 2012, met with Teva’s search committee and its chairman to express his agreement to serve as its next CEO, the Calcalist financial news website said late on Wednesday.

Both companies said they did not comment on market rumors.

Teva was left without a permanent CEO in February after Erez Vigodman stepped down, leaving new management to try to restore confidence in the world’s biggest generic drugmaker after a series of missteps. Chief Financial Officer Eyal Desheh also resigned at the end of June.

AstraZeneca’s shares fell to a two-month low of 49.21 pounds on Thursday. Teva’s shares traded up 4 pct to 114.5 shekels in Tel Aviv.

Moving to a generics drugmaker, albeit the world’s largest, would be a big change in direction for French-born Soriot, 58, who had made research-based pharma his whole aim at AstraZeneca.

During his five years at the company he successfully defended Astra against a $118 billion takeover approach from Pfizer.

He has rebuilt AstraZeneca’s drugs pipeline, both through research and acquisitions, to replace lost revenue from a wave of patent expiries on many of its blockbuster medicines in recent years.

Soriot is now waiting for all-important data from a MYSTIC trial of a lung cancer candidate, which Goldman Sachs has said will be one of the year’s most important clinical readouts.

The report of Soriot’s departure unnerved some investors and prompted analysts to question whether reports of a move suggested that the results could fail.

“Such a move only makes sense if Mystic is expected to disappoint,” said Trinity Delta analyst Mick Cooper.

However UBS analysts, who described Soriot as well-regarded, said they did not see a readacross.

“We do not see the reports, even if true, as any indication of the specific results of the MYSTIC trial,” they said. “If Astra knew the results, they would have announced them.”

UBS said one positive interpretation of the report could be that Soriot believes a lot of the restructuring is done.

Calcalist said Soriot was expected to earn twice as much as Vigodman and receive a bonus upon signing the contract, estimated at about $20 million. It said the financial terms were still being discussed.

Teva’s chairman, Sol Barer, said in May his top priority was the continuing global search to identify a candidate with “deep and broad pharmaceutical experience” to serve as Teva’s permanent CEO.

Then chairman Yitzhak Peterburg replaced Vigodman on a temporary basis.

When asked whether Teva might waive its requirement for the CEO to be based in Israel, Barer said in May: “We are looking around the world for the best candidate. We are committed once we find that candidate to do what it takes to bring that candidate to Teva.”

AstraZeneca has been active in Israel since 2009.

Reporting by Paul Sandle, Ben Hirschler and Tova Cohen; Editing by Jane Merriman and Susan Fenton

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