Unless you’ve been on vacation in the Amazon or doing research in the Antarctic you’ve heard the reports: AstraZeneca chief exec Pascal Soriot was said to have signed on as the new chief at Teva.
Friday, though, AstraZeneca confirmed Soriot would be around to lead the U.K.-based drugmaker’s July 27 earnings call. It appeared to be a nonconfirmation confirmation that he’s staying put.
You could call the whole episode a rumor-fueled charade, fed by AZ’s two-day silence on the subject. But though there are exceptions, we’ve found over the years that rumors typically don’t arise out of nowhere. True, some M&A talk catches fire on an investor or analyst playing third-party matchmaker, but even anonymous deal news that goes nowhere often just means the deal itself went nowhere.
Case in point: Calcalist, which kicked off the story with its anonymously sourced report. That business pub has been contradicted before; Teva denied its reports of 5,000 layoffs there. But Teva was cutting jobs, just not that many (at least not yet).
So, how did Soriot arise as Teva’s so-called savior CEO? Given the fact that he appears to be staying at AZ’s helm, was the story naught but rumor gone out of control, reported all over Israeli media, or could both be true? Here are some ideas.
Not and never true. Someone saw a Soriot look-alike at Teva headquarters, added in some in-discussion salary numbers and put those two together with Teva interim chief Itzhak Peterburg’s promises to get a world-class pharma CEO on board. The search committee’s wish list got out and got passed around as fact. Take your pick of misleading facts. Voila! New CEO.
Partly true. As Teva cast about for candidates, it approached Soriot. No dice. It came back with a very generous offer. Soriot considered it—who wouldn’t?—but after some mulling-over and perhaps even an interview, said thanks but no thanks.
No longer true. Soriot, wooed by Teva, saw an opportunity for not only a pay boost but a clean slate and a brand-new challenge. Turning around the Israeli drugmaker would make him a hero, given the failures of its previous three CEOs. On the verge of accepting the offer, subject, perhaps, to ratification by Teva’s newly expanded board, Soriot pulled out.
No longer true, psychological version. All of the previous scenario and this: Soriot saw how the news sent AZ shares into freefall. That has to make a person feel wanted and needed. He heard critics saying he’d be leaving AstraZeneca high and dry in the middle of a turnaround he engineered, short of the ambitious revenue target he’d used to fend off Pfizer’s 2014 takeover offer. The combination convinced him to stay.
Not true or no longer true, and Teva’s fault. The Israeli drugmaker, which has had trouble keeping its top executives, will be a tough turnaround. The company’s board appears to be formulating strategy without its new CEO, which could well hamstring the new chief’s own efforts. Maybe Soriot was ready to deal with all that, but negotiations broke down. Maybe Soriot saw the job for thankless and turned the company away.
Not yet true. Though most reports interpreted it as a confirmation that Soriot is staying, AstraZeneca’s statement about his earnings-call presence was just that. He’ll be there July 27. After that, no guarantees. The statement arrests AZ’s share dive, giving the company time to forge a plan for its future without Soriot.
We may never know what happened, if anything, between Teva’s search committee and Pascal Soriot. Or—who knows?—we might get a definitive answer soon. Stay tuned. If nothing else, the company’s Q2 earnings call could be more interesting than usual.