AstraZeneca bosses to leave after boardroom 'coup'

 
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In a very unusual move, the chief executive of AstraZeneca, David Brennan, and the chairman, Louis Schweitzer, are both retiring earlier than expected.

Sources tell me they were encouraged to go by the other non-executives, against the background of concerns from shareholders that the performance of the huge drug company has been disappointing.

"The board took the view we needed change, because of the urgency of implementing a new strategy; any hiatus would not have been right or acceptable," said a source close to the company. "It was difficult and painful. Forcing through this kind of thing is not easy."

It is the departure of Mr Brennan, who has held the reins for more than six years, which is more significant. The finance director, Simon Lowth, will replace him on an interim basis.

Mr Schweitzer is standing down three months before he was due to go, so that a new chairman - Leif Johansson - can begin the search for a permanent chief executive.

First quarter profits, also announced today, have fallen 38% to £1.3bn - and the group warned that profits in the year as a whole will be worse than expected.

"People will doubtless connect their departures with the first-quarter figures," said a source. "That's wrong. The board has been concerned for some time that we needed a new chief executive. We haven't reacted to one poor set of results".

The priority, I am told, is to improve the productivity of research and development, possibly by doing deals with other drug companies.

Leif Johansson, former chief executive of Volvo, will succeed Mr Schweitzer on 1 June. That will also be Mr Brennan's departure date.

 
Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    +7

    Comment number 6.

    "The priority, I am told, is to improve the productivity of research and development, possibly by doing deals with other drug companies."

    It'll have to be. They can't do it themselves:

    http://www.bbc.co.uk/news/uk-england-leicestershire-15982950

    1200 highly skilled staff. Gone.

  • rate this
    +6

    Comment number 14.

    The priority is to improve R&D productivity?? You can't do that by sacking 1000's of scientists and shutting R&D sites down. Those who are left are looking over their shoulder and dealing with the ensuing re-orgs where middle managers spend all their time fighting for their empires. No-one is actually spending much effort on finding new medicines!!!

  • rate this
    +4

    Comment number 10.

    This story has made me think about the laws of incentives. Currently it is sticks for the poor and carrots for the rich. Let's reverse this and pay a generous bonus to those on JSA who find themselves a job and keep it for six months but deduct payments from directors who do not meet performance targets but who will be strongly 'incentivised' to succeed.

  • rate this
    +4

    Comment number 11.

    This is part of a wider re-structuring within BigPharma as important patents for some big money spinning drugs are expiring. Cheaper generic drugs are becoming more available so profits dip. Big Pharma focuses on drugs which make profits - IE you dont actually get better you stay on the drug long term. There's little profit in meds that actually "cure" people so research & development reflect this

  • rate this
    +4

    Comment number 19.

    If improving R&D productivity is the aim, why did they hire Mackay as head of R&D?? In his 10 years as head of Pfizer R&D he found nothing and destroyed $BB in shareholder value. He is the last person you would hire - but they did. Apparently he has 'experience at the top level of Pharma R&D'. Some ability to discover new drugs would have been nice but not on the AZ job spec! AZ is doomed...

 

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