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For some chief executives, a $100bn takeover battle would be something to relish. Pascal Soriot is not one of them.
With the US drugmaker repelled, at least for now, Mr Soriot is relieved to be getting back to the business of making medicines: “I find it a lot more exciting to be talking to customers and scientists.”
The 55-year-old says life has already returned to normal after Pfizer abandoned its pursuit last week. Within hours, he had boarded a flight across the Atlantic to visit AstraZeneca facilities in Delaware and Massachusetts before attending a cancer conference in Chicago. Yet the shadow of Pfizer still looms over AstraZeneca, with continuing speculation that the Viagra maker will revive its bid later this year. If AstraZeneca is to preserve its independence in the long term, Mr Soriot must convince investors that his standalone strategy can deliver more value than the premium offered by Pfizer.
With two more years of revenue decline forecast as old drugs lose patent protection, Mr Soriot must show progress towards a new generation of products – including cancer, diabetes and asthma drugs – if he is to win the argument. Pfizer’s approach has focused minds throughout the company. “It’s been like a team-building exercise,” he says. “I spent several hours on the plane to America responding to supportive emails. Everyone now realises the importance of delivering the pipeline.”
When Pfizer made its approach in April, Mr Soriot could not have been in a worse place to lead the defence. He had just stepped off a flight at 5am in Sydney when he received a text from Leif Johansson, AstraZeneca’s chairman, to say that Ian Read, chairman and CEO of Pfizer, had expressed interest in a takeover.
Mr Soriot considers himself an adopted Australian after spending several years there as a salesman for his first employer, Roussel Uclaf, a French pharmaceuticals company. He also had stints in New Zealand, Japan and the US but it was Australia where his family put down roots. He has a home in Sydney and his two children and one grandchild live there.
His hopes of a quiet family break banished, Mr Soriot’s first instinct was to jump straight back on a flight to London. But with urgent talks needed involving board members, shareholders and advisers, he decided it was too risky to be out of reach at 30,000ft. “I spent the next two days on the phone almost nonstop.”
May 23, 1959
Studies veterinary medicine at the École nationale vétérinaire d’Alfort at Maisons-Alfort near Paris
1986-2000: Undertakes spells in New Zealand, Australia and Japan for Roussel Uclaf, a French pharmaceuticals company
2000-2006: Various roles at Aventis, including US chief operating officer
2006: Becomes chief executive of Genentech, Roche’s Californian biotech subsidiary
chief operating officer of Roche’s pharmaceuticals division
2012-present: Appointed CEO of AstraZeneca
Family: Married, with two children
Interests: Cycling, horseriding, skiing
Once back in London, he was right in the public spotlight for the first time in his career. After nearly three decades in big pharma, Mr Soriot was well known in the industry but not beyond. This set him apart from Sir Andrew Witty, his more high-profile counterpart at GlaxoSmithKline, the other big UK drugmaker. Mr Soriot, in contrast, was a relative stranger to Britain’s business establishment when the Pfizer bid put him at the centre of what would have been the biggest foreign takeover in UK corporate history. “Given a choice I would always rather focus on the medicine. I’m not the best at partying.”
For someone who shuns the limelight, Mr Soriot showed a knack for getting his message across when quizzed by UK lawmakers about the proposed Pfizer deal. In a televised hearing, he warned that a takeover might put lives at risk by delaying new cancer drugs – a line that was eagerly picked up by UK media sympathetic to AstraZeneca’s cause.
Mr Soriot has a long experience of mergers dating back to the takeover of Roussel Uclaf, by Hoechst of Germany. His next stop was Aventis, which was bought by Sanofi, which had by then acquired Hoechst. “I’ve never said mergers should never happen,” he says. “But it depends how it is done. You can cut costs but the money you save can easily be outweighed by the value destroyed if you do not get the integration right.”
Mr Soriot was in charge of one of the biggest and most challenging drug industry integrations of recent years as CEO of Genentech when it was bought by Roche for $46.8bn in 2009.
The clash of cultures between a freewheeling Californian biotech company and a buttoned-up Swiss multinational meant there was plenty that could go wrong. “Genentech was a company full of smart people who were very upset and worried about the idea of another company coming in and making the decisions,” he says. “My priority was to reassure people that we were not going to change the culture. It took a lot of effort.”
Could Pfizer do the same with AstraZeneca? Mr Soriot will not comment directly but makes clear his scepticism of deals driven by cost savings, acknowledged by Pfizer as one of its big motivations. “You do not become more productive by tying together two big organisations and firing thousands of people, you do it by becoming smarter in the way you develop medicines,” he says.
When Mr Soriot was hired from Roche in 2012, AstraZeneca was the sick man of the European pharmaceuticals industry. It faced steep revenue declines as old blockbuster drugs fell off the patent cliff with few signs of new ones to replace them.
Three recent drug failures in late-stage development had created a risk-averse culture. “People said, ‘we must never again fail in late stage’. If you take that approach you never fail but you also reduce the chances of success because everyone becomes too conservative,” he says.
Mr Soriot made a statement by reviving an ovarian cancer drug called olaparib which had been discarded as too risky. Today, the treatment is among the company’s most promising experimental products.
His predecessor, David Brennan, had tried to solve the innovation problem by buying Medimmune, a US biotech company, but investors were convinced the deal was a failure.
One of Mr Soriot’s first moves was to restore some of Medimmune’s autonomy. This fitted in with a broader move to break up research and development into smaller, decentralised teams more akin to biotech start-ups.
AstraZeneca is not alone in doing this: across the industry there is a recognition that scale is often the enemy of innovation in drug development. However, Mr Soriot has done more than most to restructure – making tough decisions such as closing AstraZeneca’s research and development centre at Alderley Park in Cheshire to make way for a new facility in Cambridge where company scientists will collaborate with local academics and entrepreneurs. “You have to start with the science from the bottom up, not top down. We’ve tried to create a spirit of entrepreneurship and risk-taking – encouraging people to run with their own ideas.”
Heavy job cuts have been concentrated in AstraZeneca’s commercial operations – headcount is down more than 10,000 since Mr Soriot took over. But these were out of necessity rather than choice: “We no longer had the products to support the size of the organisation. Cutting people and increasing productivity are not necessarily the same thing.”
Mr Soriot describes his management philosophy as one of “casual intensity”, influenced by his experiences in Australia and California. “I like to work with people who are trying to be the best at what they do but who are also relaxed.”
When not working, he enjoys horse riding, cycling or skiing. He would have had time to do more of those had Pfizer won its battle for AstraZeneca – and would have walked away with several million pounds in the process.
He was never tempted, he insists. “I’m in the same position as the other shareholders in that I could have made more money in the short term but I believe we can create more value in the long run.”
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