AstraZeneca plc (ADR) (AZN) Faces “Tremendous Operational Challenges”

LONDON — Pharmaceutical group AstraZeneca plc (ADR) (NYSE:AZN) was in the headlines at the weekend after the Telegraph anonymously quoted a top-five shareholder speaking out over the uphill struggle facing the FTSE 100 member, while insisting chief executive Pascal Soriot is the right man for the job.

The major shareholder claimed AstraZeneca faces “tremendous operational challenges” to develop a new pipeline of successful products against a backdrop of regulatory hurdles, company restructuring, and austerity-driven pricing.

However, the shareholder apparently remains confident the company is moving in the right direction, by simplifying the business and focusing on organic growth through internal R&D, rather than “disruptive” major takeovers.

AstraZeneca plc (ADR) (NYSE:AZN) could face a potentially awkward annual general meeting this Thursday, after the Local Authority Pension Fund Forum, which owns 2% of the company, advised its members to vote against the “golden hello” pay package awarded to Soriot.

The generous payout, worth up to 11 million pounds this year, includes 1 million pounds in compensation for Soriot’s lost bonus at previous employer Roche.

AstraZeneca responded in a statement:

Our remuneration policy promotes long-term, sustainable growth in shareholder value. We are committed to levels of remuneration that are sufficient to attract, retain and motivate senior employees of the requisite quality, while avoiding paying more than is necessary.

Since joining the company in October, Soriot has made sweeping changes to the company’s management, and in March unveiled a “new strategy to return to growth and achieve scientific leadership.”

In a six-point plain, he emphasized “dramatically simplifying the business,” “rebuilding the R&D engine” and “launching a steady flow of specialty care products.”