AstraZeneca Plc (AZN,AZN.L) said Thursday David Brennan, its chief executive officer and a board member, has decided to retire end of May. The announcement came moments after the British pharma giant reported weak first-quarter results and lowered its full-year guidance, amid challenging market conditions and loss of exclusivity of several brands.
Brennan will retire from AstraZeneca and relinquish his board responsibilities on June 1, 2012. The Board has named Executive Director and Chief Financial Officer Simon Lowth as interim CEO from the same date, until a permanent successor is found. Julie Brown, Vice President - Group Finance, will become interim CFO.
Lowering the 2012 guidance, the company said revenue will be adversely impacted by the loss of patent exclusivities of antipsychotic drug Seroquel IR, heart drug Atacand in global markets and cholesterol drug Crestor in Canada.
During the quarter, the company recorded restructuring costs of $702 million, compared with $143 million in the prior-year quarter. It was in February that the company announced plans to cut about 7,300 jobs as market exclusivity for a few of its key drugs was set to expire in 2012.
In the first quarter, the company's profit before tax fell 38 percent to $2.05 billion from $3.29 billion in the previous year. Earnings per $0.25 ordinary share were $1.28, down from $2.07 per share a year ago.
Core earnings per share were $1.81 in the first quarter, down 19 percent from $2.23 per share a year ago.
On average, three analysts polled by Thomson Reuters expected the company to earn $1.78 per share. Analysts' estimates typically exclude special items.
Revenues for the quarter declined 11 percent to $7.35 billion and also came below analysts' estimate of $7.85 billion.
Loss of exclusivity of Seroquel IR, Nexium and Arimidex, accounted for 8 percent decline in revenue. In addition, disposal of Astra Tech last year accounted for 1.7 percent of the revenue decline, the company noted.
Brennan said, "The anticipated impact from the loss of exclusivity on several brands, together with challenging market conditions, has made for a difficult start to the year in revenue terms."
In US, revenues were further pressured by the US healthcare reform. Revenues in Western Europe bore the brunt of generic competition and lower realized prices. However, emerging market revenues rose 1 percent, driven by 13 percent increase in China.
Looking ahead, AstraZeneca anticipates a rebound in the remaining three quarters, but said achieving double-digit growth for the full year may be a challenge.
The company also lowered its core earnings per share target for the full year 2012 to a range of $5.85 to $6.15 from the previous range of $6.00 to $6.30. Analysts expect the company to earn $6.14 per share on revenues of $30.01 billion for the year.
AZN closed Wednesday's regular trading at $45.91 on the NYSE. AZN.L is currently trading at 2,712 pence, down 129 pence or 4.54 percent, on a volume of 2.67 million shares on the LSE.
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