AstraZeneca's ($AZN) new CEO wasted little time in making a big move. Pascal Soriot, who took the reins today, suspended the company's stock-buyback plan with $2.2 billion left to go on a $4.5 billion target for this year. The buybacks won't resume till after Soriot and the AstraZeneca board review their going-forward strategy--if then.
Analysts said stopping the buybacks is a simple leave-all-options-open move. Conserving a couple billion in cash would give AstraZeneca more flexibility to make deals, Barclays' Brian Bourdot told Bloomberg. "It's a bit of a surprise that they changed course midyear, but a new chief executive likes to take control and see what the options are," Bourdot said.
Whether Soriot might do a big deal--and what he'd choose to do if he doesn't--is a matter for big-time speculation these days. AstraZeneca has been floundering as its pipeline of new products falls short and its big products lose ground to generic rivals. Ex-CEO David Brennan left amid criticism from the company's biggest shareholders. His "no big deals" approach came in for criticism, and now, M&A matchmakers are picking out possible targets, big and not-so-big.
But the advent of new leadership has raised new hopes. Chairman Leif Johansson stepped into his role a month ago, and now, Soriot has left Roche ($RHHBY) for the challenge of remaking AstraZeneca.
"As I assume my new responsibilities at AstraZeneca, I believe this is a prudent step that maintains flexibility while the Board and I complete the company's ongoing annual strategy update," Soriot said in a statement. The new-and-improved strategy is expected when the company releases its 2012 results early next year.