AstraZeneca’s Mackay, Zook to Leave Company This Month
AstraZeneca Plc (AZN)’s head of research and development and its most senior executive for worldwide sales and marketing activities are leaving the company after Chief Executive Officer Pascal Soriot eliminated their jobs.
Martin Mackay, president of research and development, and Tony Zook, executive vice president of global commercial operations, will step down at the end of the month, London-based AstraZeneca said today in a statement. The company will divide Mackay’s duties into three new senior research and development roles, according to the statement.
The management shakeup comes as Soriot, who took over Oct. 1, reviews strategy and looks for ways to revive the company’s ailing pipeline following several drug development setbacks. AstraZeneca said last month that fostamatinib, its experimental drug for rheumatoid arthritis, failed to show a benefit against AbbVie Inc. (ABBV)’s Humira in a mid-stage trial.
“He has an uphill battle in fixing the company’s pipeline problems,” Navid Malik, an analyst with Cenkos Securities Plc (CNKS), said in an interview. “It’s a wholesale change of R&D strategy.”
The shares rose 0.4 percent to 3,041.50 pence in London trading, giving the company a market value of almost 38 billion pounds ($61 billion).
Mene Pangalos, Bahija Jallal and Briggs Morrison will fill the three new research positions. Pangalos, who was recruited from Pfizer (PFE) Inc. by Soriot’s predecessor, will oversee discovery and early-stage development in chemical-based medicines as executive vice president for innovative medicines. Jallal will be responsible for discovery and early-stage development in treatments derived from living cells as head of the company’s MedImmune unit. Morrison, another Pfizer veteran, will guide late-stage product development as global medicines chief.
The company also created a position to oversee global portfolio and product strategy and act as a bridge between the scientists and the sales force. That appointment will be made at a later date, AstraZeneca said.
Mackay was recruited by David Brennan, who retired in June amid drug research setbacks and slower growth. Mackay, like Pangalos and Morrison, came from Pfizer, the world’s largest drugmaker, in 2010 and oversaw a restructuring at AstraZeneca last year where the company shuttered two plants and outsourced its neuroscience research.
Zook has worked at AstraZeneca since 1997 and replaced Brennan as head of U.S. operations when Brennan became CEO. Zook has also served as CEO of AstraZeneca’s MedImmune unit, acquired for $14.7 billion in 2007.
“This new senior executive team structure, that draws heavily from the leadership talent within the company, enables us to bring an even sharper management focus to key pipeline assets, key brands and key markets, and helps us further accelerate decision-making,” Soriot said in the statement.
The division of research and development responsibilities “makes sense” and is structured like that of Roche Holding AG (ROG), where Soriot was head of pharmaceuticals, Alistair Campbell, an analyst with Berenberg Bank, said in an interview. Mackay and Zook worked for Brennan and were in contention for the top job when he left, Campbell said.
“There was probably going to be a management change at some point,” he said. “The company has made some good hires recently, particularly in R&D.”
Last year the company announced it would cut 7,300 jobs worldwide, including 2,200 in R&D, as drugs that account for more than 40 percent of sales lose patent protection by the end of 2014. AstraZeneca’s second-best-selling drug, Seroquel for schizophrenia, lost U.S. patent protection in March, while the patent on Nexium for ulcers, the third-biggest seller, expires in the U.S. in 2014.
Soriot suspended the company’s share buyback his first day on the job to allow for more flexibility as AstraZeneca looks for licensing and acquisition deals to replenish its pipeline.
The purchase of Ardea Biosciences Inc. for $1.1 billion last year was the first acquisition greater than $1 billion since AstraZeneca bought MedImmune. The company has made a series of licensing deals and said last year that it would pay Bristol-Myers Squibb Co. (BMY) $3.4 billion to co-develop the diabetes drugs of Amylin Pharmaceuticals Inc., which Bristol acquired for $5.3 billion.
AstraZeneca is due to report fourth-quarter results Jan. 31, when it will issue its forecast for 2013.
To contact the reporter on this story: Allison Connolly in Frankfurt at email@example.com