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AZ's Soriot upbeat on firm's prospects

Says pharma company can return to growth by 2017
Pascal Soriot, AstraZeneca

AstraZeneca's (AZ) chief executive Pascal Soriot gave a bullish presentation at the JPMorgan conference this week, suggesting the company is poised for a dramatic revival in fortunes.

The patent cliff has hit AZ hard in the last few years, and a string of late-stage product disappointments left the company looking fragile when Soriot took over the helm from David Brennan in 2012.

Soriot has presided over a series of deals across all phase of drug development to boost AZ's pipeline, swelling the number of projects in phase III to 11 which is just about double the number a year ago, with another 27 in phase II.

The deal-making culminated in the agreement to buy Bristol-Myers Squibb out of the two companies' diabetes alliance, which Soriot said should allow AZ to return to growth and post revenues in 2017 that will be "broadly in line with 2013" after an intervening slide as key patents on gastrointestinal therapy Nexium (esomeprazole) and cholesterol drug Crestor (rosuvastatin) expire.

Analysts at Panmure Gordon note that is an ambitious target, representing a $3.3bn advance on consensus estimates with around $1.6bn coming from the BMS deal and the remainder attributed to growth from products emerging from the pipeline. At the moment analysts are predicting this pipeline growth would be around $1.4bn, while AZ is suggesting it will be upwards of $3bn.

"In our view, a step-change from $1.4bn to $4.7bn from the pipeline is aggressive and management may be setting itself up for a fall," commented PG's Savvas Neophytou in research issued this morning. He points out that AZ's management made a similar assumption in 2010 that failed to materialise and prompted a change in management.

Among the pipeline drugs that AZ expects to deliver this growth are ovarian cancer candidate olaparib, selumetinib for non-small cell lung cancer and benralizumab for severe asthma.

AZ is scheduled to provide a more detailed update on its pipeline progress at the company's annual results conference on February 6, 2014.

Article by
Phil Taylor

16th January 2014

From: Sales



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