Pascal Soriot says confidently that AstraZeneca ($AZN) will make its forecast of $45 billion in sales by 2023, the one it trotted out during its fight with Pfizer ($PFE) to convince shareholders it was best going it alone. What does he base that on when some forecasts suggest otherwise, that the products in the pipelines have less growth potential and the company's history suggests a weakness in science?
Soriot tells Forbes' Matthew Herper the forecasts are flawed and the company has suffered less from weak science than from mismanagement by former execs and an under performing commercial strategy team. It was cutting costs when it should have been investing and is now having to invest when it might otherwise be cutting.
Oh, and that Pfizer battle. Well Soriot says that was a team builder. "Believe me, it's been quite a fantastic engagement for the organization, the team spirit building too."
|AstraZeneca CEO Pascal Soriot|
In a far-ranging interview with Herper, Soriot not only talks down his predecessors at AstraZeneca, he takes a shot at a competitor, while defending decisions. He dismisses the idea of his company following the Valeant Pharmaceutical ($VRX) model of buying products and marketing them well. "I don't know if the Valeant model is a sustainable one," he said. "It's pretty simple. If you don't come up with medicines that help patients, there is no way you can have a sustainable business creating value for shareholders."
Soriot told Herper that the company has better scientists than its poor drug development record suggests. He said the previous leadership team did not manage projects well, pointing to olaparib, which was shelved when it failed in a Phase II trial for ovarian cancer. "When I saw olaparib, for me, it was a clear reflection of good science and poor management ... Essentially, the commercial teams were under-excited." The drug is now in a Phase III trial for a smaller patient population and Soriot expects it to do well.
Soriot continues to insist heart treatment Brilinta, which has yet to live up to early forecasts, can be a winner. The company forecast predicted it will be pulling in $3.5 billion by 2013, this for a drug that reported first quarter sales of $99 million. And he says the company also should see great value from many of its pipeline drugs for cancer. The company recent projected peak sales of $3 billion for drug cancer candidate AZD9291, although analysts say $1 billion to $2 billion seems more realistic. Oh, and as far as the fish oil pill, Omthera, it bought last year for $443 million. Since the company didn't pay much, if should pay for itself if it is simply is marketed for high triglyceride patients. If it gets a wider indication, then it will be a big winner.
Soriot says he knows that by turning away Pfizer's $119 billion offer, his company is now under tremendous pressure to perform and will be highly criticized for any stumbles, or even face another takeover fight. But that is a good thing, he says, because it makes one focus.
"The truth is that whether it's Pfizer or not, a company that is successful and is able to get the success reflected in its share price is in a good place," Soriot told Forbes. "A company that doesn't deliver is in a bad place and is exposed, whether it's Pfizer or someone else. I'm not sure that it changes much at all."
- here's the Forbes interview