July 14, 2017
By Alex Keown, BioSpace.com Breaking News Staff
LONDON – As rumors swirled about whether or not AstraZeneca Chief Executive Officer Pascal Soriot was leaving for Israel-based Teva Pharmaceuticals , investors expressed their concerns with a sell off that cost the British company $4 billion overnight.
Shares of AstraZeneca fell 5 percent after Israeli financial publication Calcalist reported that Soriot was taking over the helm of Teva. AstraZeneca stock fell from Wednesday’s close of $32.92 per share to a Thursday close of $32.28 per share. This morning shares are climbing and trading at $33.19 per share as of 11:32 a.m. Thursday’s closing price was the lowest the stock has been since May 8 when it was trading at $30.23.
AstraZeneca has declined to comment on Soriot and his possible defection, which has sparked investor concern, particularly since the London-based company did not deny the Soriot rumors. That fueled the fire of concern for many.
There are numerous concerns for investors, particularly as AstraZeneca awaits results from its highly anticipated Mystic lung cancer trial. The Phase III lung cancer trial assesses progression free survival and overall survival endpoints in patients with PDL1-expressing tumors for both durvalumab monotherapy and the combination of durva + treme, as well as in ‘all comers’ for the combination of durva + treme, versus standard of care chemotherapy. If the readouts are significantly positive, analysts have suggested the treatment could be worth an estimated $2.5 billion in annual revenue. If Soriot is willing to walk away from the much larger AstraZeneca for Teva, the world’s biggest generic drugmaker, some investors may have seen that as a signal that the Mystic trial may not meet is endpoints.
If those results are not positive, Soriot said earlier this year that poor results could trigger companies to begin looking at acquiring the company, much like Pfizer (PFE) sought in 2014. Soriot was instrumental in fending off that acquisition, which has left a bad taste in some top investors’ mouths, according to reports.
Leerink analyst told Reuters that if Soriot leaves AstraZeneca, the drug giant would be “rudderless.” That backs up Bloomberg’s Chris Hughes, who said AstraZeneca’s senior executive leadership team is essentially Soriot and Chief Financial Officer Marc Dunoyer. One of Soriot’s chief lieutenants, Luke Miels, was already poached by rival GlaxoSmithKline . While at AstraZeneca, Miels was head of Global Product & Portfolio Strategy, Business Development & Licensing, Corporate Affairs, Global Medical Affairs, and Pricing and Market Access.
Teva has been operating without a CEO since February of this year when CEO Erez Vigodman abruptly left his position after serving three years in that role. Shares of Teva are down this morning, trading at $32.79.
If Soriot is taking over at Teva, Calcalist noted he would earn much more than the previous CEO, who had a salary of $5.7 million. In its report, Calcalist said Soriot would earn about twice that amount and was also eligible to receive a signing bonus of $20 million.
