AstraZeneca Needs New Strategy After Boardroom Shake up - EP Vantage Investigates
Apr 27, 2012, 09:00 ET
LONDON, April 27, 2012 /PRNewswire/ --
As AstraZeneca PLC Chief Executive David Brennan steps down, EvaluatePharma Ltd.'s EP Vantage award-winning team of journalists investigates the challenges and strategic options facing by the company.
Whoever becomes the new chief executive of AstraZeneca faces a difficult task - choosing a path to pursue to resuscitate the ailing Anglo-Swedish drug maker's growth prospects. Options include a transformative acquisition, an outright sale of the company, or continuation of its current strategy of investing in R&D and smaller bolt-ons and hoping for a better success rate. None of them will provide an easy fix.
It has become crystal clear that AZ needs a new strategic direction, or the very least invigoration. Too many of its big hopes have been dry holes. With a market cap of $55.76bn, investors now value the company at less than the net present value of its marketed products, worth $75.6bn according to EvaluatePharma's NPV Analyzer. That figure implies little confidence in the group delivering on existing products, let alone its pipeline (Pipeline setbacks hurt AstraZeneca, December 20, 2011).
It would perhaps be an exaggeration to call AZ a shadow of its former self in 2018, but based on current forecasts the company's prescription sales are projected to shrink at an annual rate above 5% a year through 2018, $10bn being erased through patent expiries (see below, and Novartis on track to become world's biggest drug maker, April 25, 2012 - http://bit.ly/IjPkWa).
These are signs of a company in need of a fix and in agitating for change at the top investors hope to find it.
World's Top 15 Pharma Companies
Market Rank Rx Pharma Sales ($bn)
Annual
growth
2011 2014 2016 2018 2011 2014 2016 2018 2011-18
Novartis 2 1 1 1 46.7 47.6 49.0 50.8 1.2%
Sanofi 4 3 3 2 39.3 42.9 45.6 47.8 2.9%
Pfizer 1 2 2 3 53.5 46.9 46.5 47.1 -1.8%
GlaxoSmithKline 6 6 4 4 35.0 38.5 43.1 45.6 3.9%
Roche 5 5 5 5 37.0 40.7 42.7 45.0 2.8%
Merck & Co 3 4 6 6 41.9 40.9 42.6 41.0 -0.3%
Johnson &
Johnson 9 8 7 7 22.3 25.8 27.2 27.3 2.9%
Teva 11 10 10 8 17.1 22.1 22.8 23.3 4.5%
AstraZeneca 7 7 8 9 32.4 26.7 25.2 22.1 -5.3%
Abbott
Laboratories 8 9 9 10 22.4 23.7 23.9 22.1 -0.2%
Bristol-Myers
Squibb 12 15 11 11 16.9 14.9 18.9 21.4 3.4%
Novo Nordisk 17 14 13 12 12.4 15.6 18.0 19.9 7.0%
Takeda 14 12 12 13 15.2 16.8 18.7 19.5 3.6%
Bayer 16 16 16 14 13.6 14.6 15.7 16.5 2.7%
Gilead Sciences 21 20 17 15 8.1 10.8 15.0 15.7 9.9%
About EP Vantage
Written by a team of experienced journalists, EP Vantage provides timely financial analysis of regulatory and patent decisions, marketing approvals, licensing deals, and M&A, giving fresh angles and insight to both current and future industry triggers.
EP Vantage is recognised by its peers and by the industry for perceptive and penetrating coverage of the sector. The team received the Commentator of the Year prize at the 2011 European Mediscience Awards in London.
About EvaluatePharma Ltd.
The market intelligence and analysis company EvaluatePharma Ltd was the first to supply reliable consensus forecasts of global drug sales and has just updated the standardized worldwide financial and forecast models with consensus product sales forecasts to 2018. EvaluatePharma also provides data on R&D pipelines, clinical trials, licensing deals, patent risk, M&A activity, valuation through product Net Present Value analysis plus daily commentary and analysis from the EP Vantage® news service.
EvaluatePharma Ltd, headquartered in London, England and in North America is represented by EvaluatePharma USA, Inc.
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