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AstraZeneca plummets on reports that CEO Pascal Soriot is set to join Israeli competitor Teva

Financial news website Calcalist has reported that Soriot is close to being unveiled as Teva’s new boss
pascal soriot
Teva, the world’s largest generic drugmaker, has been without a CEO since February

Shares in AstraZeneca PLC (LON:AZN) plummeted on Thursday morning after reports emerged overnight that the drugmaker’s chief executive is set to leave for Israeli rival Teva Pharmaceutical Industries (NYSE:TEVA).

Pascal Soriot has been Astra’s boss since 2012 but he is set to be named as Teva’s new chief executive, according to the Calcalist financial news website.

In its report, Calcalist said Soriot attended a meeting with Teva’s search committee and its chairman where the 58-year-old expressed his interest to serve as its next boss.

Teva – the world’s biggest maker of generic drugs – has been without a permanent chief executive since Erez Vigodman stepped down back in February, while chief financial officer Eyal Desheh also resigned at the end of June.

Soriot is expected to earn twice as much Vigodoman and he would also receive a tidy US$20mln bonus upon signing the contract, Calcalist reported.

When pressed for a response, AstraZeneca and Teva both said they didn’t comment on market rumours.

Citigroup not a believer but admits it ‘looks bad’

Citigroup analyst Andrew Baum can’t see the logic in the rumoured move but adds that he can’t completely rule it out.

“While neither Teva nor AstraZeneca has confirmed, we cannot dismiss the Calcalist article given the track record of the Israeli press and the detailed disclosure of the compensation package,” said Baum in a note to clients this morning.

“That said, we have significant trouble reconciling the timing of the potential departure pre-MYSTIC and Dr Soriot's skill set match with Teva.”

Speaking of MYSTIC, the results of which should start feeding through shortly, Baum doesn’t think there is any read through in Soriot’s possible departure but concedes that “optically it looks bad” if it is confirmed.

The analyst still has the stock as a ‘buy’ with a price target of £60.

Astra shares were off 4.5% on Thursday morning to £49.60.

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