Brennan falls on his sword after Astra profits fall and shares dive

AstraZeneca’S under-pressure chief executive David Brennan is to step down from his post amid growing investor discontent over the drug giant’s performance.

The announcement, alongside weaker-than-expected first-quarter profits, saw more than £2 billion wiped off the value of the company yesterday.

Brennan, who will leave on 1 June, will be replaced on an interim basis by chief financial officer Simon Lowth while a permanent successor from inside or outside the company is found.

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The news came as the underlying earnings at the UK’s second-largest drugs group fell sharply in the first quarter, underlining the company’s need to find new sources of growth as key products lose patent protection. Pre-tax profits fell by 38 per cent to $2.1 billion (£1.3bn) while there was an 11 per cent drop in revenues to $7.3bn. The group also lowered its target for full-year earnings per share.

Brennan said: “After more than six years as chief executive of this great company I have decided that now is the right time to step down and allow a new leader to take the reins.”

He added: “I am confident that AstraZeneca will continue to have a positive impact on the lives of patients around the world and by doing so will deliver real value to our shareholders.”

Brennan was appointed to his current role in January 2006 and is one of the longest serving chief executives in the pharmaceutical sector.

The company has recently stepped up its pace of deal-making to bring in more promising new drugs from other companies, but Brennan has been under fire from some investors for not acting sooner.

AstraZeneca faces a slump in sales, following the loss of patent cover on antipsychotic Seroquel last month, while heartburn pill Nexium and its top-selling heart drug Crestor lose US protection in 2014 and 2016, respectively.

It has few new drugs in development to replace these big sellers and its problems mean it trades on only around seven times this year’s expected earnings, the lowest multiple for any major international drug company. Shares closed down 6.1 per cent, or 174.5p at 2,666.5p.

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