AstraZeneca ($AZN) has a new CFO to replace the departing Simon Lowth: Marc Dunoyer, who joined the company from GlaxoSmithKline ($GSK) earlier this year. He'll have plenty of work on his plate: The company's sales continue to slide on generic competition, it's in the middle of a cost-cutting plan and headquarters move, and more patent expirations are on their way.
Plus, he'll have to help CEO Pascal Soriot manage R&D costs to keep the pipeline investment coming without busting the margin goals AstraZeneca set forth earlier this year. Not to mention the dividend, that all-important carrot for Big Pharma investors.
For the third quarter, revenue dropped by 4% to $6.25 billion on a constant-currency basis. Core profits fell by 30%. And earnings per share excluding items of $1.21 per share fell short of analyst estimates. As earnings went out, AstraZeneca shares went down, falling 2.5% in early London trading, the Financial Times reports.
And as Sanford Bernstein analyst Tim Anderson pointed out in a note to investors, the patent losses eroding AstraZeneca sales today will come back for an encore next year and the next. Nexium, the stomach-acid drug, loses exclusivity early next year, and Crestor, its top-selling cholesterol pill, falls off patent in 2015. The Seroquel patent loss in 2012--which took an immediate and hefty bite out of the company's sales--offers a pattern for the coming pain in Nexium and Crestor sales, Lowth said during the third-quarter earnings call.
All these demands had some analysts and investors nervous about Dunoyer's appointment. Citi analyst Andrew Baum said in a note that the company's "heavy income-focused investor base" would likely be concerned about the choice. But during the earnings call, Soriot promised that Dunoyer would be committed to AstraZeneca's dividend promises. Plus, Soriot said, he wanted a strategic partner as CFO, rather than a strictly numbers-oriented person.
- read the AstraZeneca release
- get more from the FT (sub. req.)
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