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Soriot flies independence flag for AZ

CEO downplays rumours of merger with Pfizer
Pascal Soriot, AZ

AstraZeneca (AZ) chief executive Pascal Soriot has reaffirmed his commitment to independence in the first public comments following rumours of a megamerger with Pfizer.

Speaking on AZ's first-quarter results call yesterday, Soriot reiterated his confidence in the company's revitalised pipeline, which has 11 candidates in phase III, adding: "we are very committed to creating this additional value on an independent basis."

Rumours of a $100bn-plus megamerger between AZ and Pfizer emerged over the weekend, with speculation focusing on Pfizer's interest in AZ's increasingly strong-looking oncology pipeline, particularly in the area of immunotherapeutic drugs.

At the moment AZ continues to look a little vulnerable financially, with first-quarter sales flat at $6.4bn while profit halved to $504m from $1bn a year ago. Around $150m in AZ's first-quarter sales was lost to generic competition, with additional patent losses in the offing, although analyst Mick Cooper at Edison Investment Research had a positive take on developments at the company.

In a research note, Cooper said the underlying financial performance of the group "highlights why the interest is there," adding: "we think AstraZeneca will return to growth faster than many believe, which underlines Pfizer's opportune timing."

Both AZ and Pfizer have declined to comment on the merger rumours, although sources suggest negotiations were ongoing in the past but ended without an agreement.

While not commenting directly on the Pfizer rumours, Soriot told investors: "We believe the best way for us to do this is to focus on science, come up with medicines that will be differentiated and help patients," he said.

"If we do that well then we'll be successful commercially and create value for shareholders."

Shareholders restless

On one issue - executive pay - shareholders did not seem to be particularly happy however, with more than 38 per cent of those attending AZ's annual general meeting (AGM) voting against the company's remuneration report for 2013.

More than 30 per cent failed to support its proposed remuneration policy for the next three years, while 43 per cent voted against the re-appointment of Jean-Philippe Courtois as a non-executive director.

Soriot himself received a pay package valued at £3.34m (around $5.6m) in 2013, a 9 per cent drop on 2012 although his basic pay in 2013 has been raised by 3 per cent to £1.13m with up to £4.35m in the offing from share options and bonuses.

Article by
Phil Taylor

25th April 2014

From: Sales

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