AstraZeneca ($AZN) is on the hunt for a replacement for ex-CEO David Brennan. Leif Johansson, who takes over as chairman today, tells The Financial Times that finding the right leader is his first priority, particularly given that the company must "navigate a period of significant change."
Simon Lowth, who is chief financial officer, is serving as interim CEO. Finding a CEO to tackle AstraZeneca's troubles--it has little in the pipeline to replace the revenue-producing drugs dribbling off patents--is no small task. But Johansson seems well-positioned for it.
AstraZeneca is a mash-up of the Swedish Astra and the British Zeneca and the fact that AstraZeneca named Johansson chairman suggests that the Swedish side of the AstraZeneca house is in ascendancy. Johansson is son of a high-ranking Wallenberg executive, which plays well with many investors since the Swedish company owns a 4% stake, The Financial Times explains. He has significant business experience with appliancemaker Electrolux and the mobile phone company Ericsson, but the Wallenberg family has large investments in both, raising the question of whether family connections were the key to those positions.
He was chief executive of Volvo during a difficult time, even selling off the car side of the business and keeping the more profitable truck line. And he came to AstraZeneca after having served as a non-executive director of Bristol-Myers Squibb ($BMY). That fact doesn't impress one fund manager that The Financial Times spoke with, who calls AstraZeneca a "train wreck" and says there is little to compare between it and Bristol-Myers Squibb. BMS, he points out, had a healthy pipeline and strategically cut its sales operations to focus on selling higher margin drugs to fewer specialists. AstraZeneca, by comparison, has little going for it, which is why Brennan got asked to leave.
The company has been trying. Martin Mackay, the head of R&D, recently laid out his blueprint to The Financial Times, which includes in-licensing more programs, buying small biotechs, partnering with rivals and possibly coming up with a few risk-sharing arrangements with private equity. He claims that after whacking 40% of the projects in the pipeline since his arrival in 2010, AstraZeneca is positioned to execute on new deals. To back his claims, he points out that he has brought on 31 of the top 50 managers in R&D from outside developers.
Whether Mackay's plans and Johansson's connections are enough to right the listing AstraZeneca is yet to be seen. Johansson's pick for CEO will tell the story.