AstraZeneca surges on Soriot’s upbeat assessment of its pipeline
Shares of AstraZeneca $AZN shot up 5.5% today as CEO Pascal Soriot says its pipeline is full to bursting with R&D prospects that can drive billions of dollars in new revenue.
And that is once again helping to spur chatter about a possible megamerger deal for the pharma giant, two years after it successfully fought off Pfizer’s embrace by boldly projecting 2023 sales of $45 billion. Today, Soriot backed away from that pledge, saying that new exchange rates would likely force its projections down to around $40 billion to $41 billion.
Citi analyst Andrew Baum got the rumor mill going earlier in the week, noting that AstraZeneca could look good to Novartis right about now. Novartis CEO Joe Jimenez, though, has made no indication that he’s thinking much bigger than the $5 billion-plus range in new acquisitions.
Soriot, who expects AstraZeneca’s progress on cancer drugs to be the main focus over the next 18 months, alluded to the buyout scuttlebutt in the call today:
“(W)e certainly have been very aware over the last few years that as we create value then at some point our pipeline becomes attractive. And so, hopefully becomes attractive to our shareholders. But of course if may be attractive to anybody. I mean, I can’t speculate more….”
It wasn’t a bad performance for a company that is looking at the imminent demise of its Crestor franchise, which accounts for $5 billion of its $23 billion in 2015 revenue.
Soriot has been wheeling and dealing over the last 4 years. But he told analysts today that that is all over. Any new deals have to be accretive (translation: new products that bring in cash). But he’s no longer avidly snapping up new projects.