AstraZeneca reported its fourth quarter earnings today and it was a t least as bad as the analysts had expected. And according to CEO Pascal Soriot, you can expect more downturn into next year too with a "mid- to high- single digit percentage" drop in sales.
AZ has already announced that it is killing a few big program in its pipeline. Soriot further communicated that is will not be buying back its own stock and will watch its dividends. But to soften blow, profit magins will also suffer. What?
Soriot says, "We will be open to more disruptive acquisitions, larger acquisitions if they make sense." Analysts quickly latched onto companies like Shire being a possible target -- such an acquisition would be expensive and much more than the $20 B mark being propped up as the current barrier Big Pharma wished to stay under.
Surprisingly, AZ stock only dropped about 2.7% -- maybe all discounting has already occurred. Need to check to see if Shire is going in the other direction or not. But if you are a company with asserts to sell -- good or bad -- you might want to get Soriot on speed dial. This is especially true if you have more than a $20 B property to move as analysts believe there won't be much competition up in that stratosphere. Likely true. See Fierce Biotech and In the Pipeline.
Posted by Bruce Lehr Jan 31st 2013.