Former Astra boss David Brennan pays high price for ‘failure’

By JAMIE GRIERSON
Published on 17/07/2012 00:00

The former boss of pharmaceuticals giant AstraZeneca has waived his entitlement to a 2012 annual bonus and has been denied performance-related share awards for the last two years.

Astra chief executive David Brennan stepped down in June after slashing full-year profit hopes and failing to tackle a shortage of blockbuster drugs as patents expire.

The FTSE 100 Index firm said Brennan, who was with Astra for 36 years, will receive 11 months’ salary – £914,122 – and £1.5 million of shares awarded in 2010..

But he has waived any bonus entitlement for the portion of 2012 in which he worked for the group, while share awards made to Brennan in 2011 and 2012 will be forfeited.

Brennan has amassed a pension pot worth £14m, according to the group’s annual report, and could receive share awards from previous years. He was one of a number of chief executives this year to succumb to shareholder pressure to step down.

Astra’s shares fell around 6 per cent between the time Brennan took charge in 2006 and his departure last month.

The UK’s second-biggest drugs maker has struggled in recent months after it lost patent cover on antipsychotic drug Seroquel and tests on ovarian cancer drug Olaparib proved it to be ineffective.

Results for the first three months of the year blamed a “loss of exclusivity” for a 38 per cent drop in pre-tax profits to $2.1 billion (£1.3bn). The group subsequently lowered its target for full-year earnings per share.

Astra’s so-called “patent cliff” – when revenues drop off as patents expire – is particularly steep as breast cancer drug Arimidex has already lost patent protection while acid reflux treatment Nexium and biggest seller Crestor will lose patent protection in the next four years.