AstraZeneca Plc (AZN) Chief Executive Officer David Brennan will retire from his post, ending a six- year tenure after repeated failures in drug development left investors skeptical of the company’s earnings prospects.
Simon Lowth, the chief financial officer, will serve as interim CEO until a replacement is chosen, the London-based company said today in a statement. AstraZeneca today cut its profit forecast for the year after first-quarter revenue sank on “challenging market conditions” and the loss of patent protection on several medicines. The stock fell the most in more than two years.
“This will be received positively,” Mark Belsey, an analyst at WestLB in London, said of Brennan’s departure in a telephone interview. “Brennan has done a good job but it’s time for someone to reinvigorate the pipeline. I still think licensing and small acquisitions are the way to go. They need someone to bring that strategy into play.” He recommends selling the shares.
Speculation mounted in March that Brennan, 58, would leave the job after the company nominated a new chairman. He steps down after AstraZeneca cut thousands of jobs, boosted dividends and bought back billions of dollars in shares. Sales growth slowed after patent protection was lost on medicines including Arimidex and Casodex for cancer, and the company didn’t bring enough new products to market.