The David Brennan era at AstraZeneca ($AZN) is over. The company's board, pressured by restless investors, asked Brennan to bow out yesterday, BBC News reports. The board also invited Chairman Louis Schweitzer to retire a few months early, to allow incoming Chairman Leif Johansson to lead the search for Brennan's replacement. CFO Simon Lowth will take over in the meantime.
AstraZeneca and Brennan both say his departure was voluntary. "I just felt the time was about right to pass the reins on to a new leader," he said at a press briefing. Whether he made the final choice or not, big AstraZeneca shareholders had been agitating for a change at the top, frustrated by recent R&D setbacks and lagging financial results. As recently as two weeks ago, Brennan was saying he intended to stick around.
Schweitzer gave Brennan a departing benediction, saying, "David has led AstraZeneca's business with skill, integrity and courage during a period of enormous change for the pharmaceutical industry and for the company. We fully understand and respect David's decision to retire and thank him for his selfless leadership of the company."
Analysts immediately started talking strategy. As the Financial TImes reports, Bernstein said the change "will probably raise questions in investors' minds about the company's strategy going forward, and whether a change in strategy causes risk to the dividend." West LB's Mark Belsey was more sanguine, saying that Brennan's exit "will be received positively." Though the CEO "has done a good job," Belsey said, AstraZeneca needs to focus on licensing and small buyouts to jumpstart its pipeline. "They need someone to bring that strategy into play," Belsey told Bloomberg.
The announcement came as AstraZeneca reported disappointing first-quarter results. But the 38% drop in profits--and a warning that profits for the year won't live up to expectations--wasn't the impetus for Brennan's departure, AstraZeneca sources told the BBC. "The board took the view we needed change, because of the urgency of implementing a new strategy," one said. "It was difficult and painful. Forcing through this kind of thing is not easy."