AZ's Brennan sees "top-line" challenges ahead

It may be the macroeconomic environment that's primarily driving AstraZeneca new-and-improved stock's performance, but CEO David Brennan (photo) has been doing his share of the work, too, the Financial Times reports.

Over the past year or so, Brennan has diversified AstraZeneca's development portfolio, partly with the buyout of MedImmune. He's resolved patent challenges against top sellers Seroquel, Nexium, and Pulmicort Respules. The company boasted strong new research on Crestor, the statin drug that showed a benefit in actual clinical outcome, rather than just cholesterol numbers.

Brennan also has cut back operating expenses by outsourcing and streamlining. Some 7,600 layoffs were announced last year, and in 2008, the closure of four European plants claimed another 1,400. (His current disclaimer that "We can't cost-cut our way to success" might be reassuring to the remainder of AstraZeneca's workforce.)

What's ahead? Brennan hints at bio-generics, which rival Merck recently jumped into in a big way. But he's not as enamored with a few other strategies employed by competitors, namely diversification into generics or consumer health (if you're not in those markets already). Nor does he put much faith in megamergers: "I don't see a big merger," he tells the FT. Whatever the strategy, Brennan has plenty of problems still to tackle, with big drugs going off patent in the next few years. "The top line is going to be challenged," he admits. We'll see how his company fares.

- read the FT interview