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U.K. drug maker AstraZeneca PLC announced Thursday that its chief executive David Brennan is to retire as the company reported at 44 percent drop in first-quarter net profit.
Brennan said that he was stepping down ahead of Thursday's annual general meeting, where he would have faced a challenge from a group of shareholders urging a change in company strategy.
For the three months ending March 31, AstraZeneca said net profit was $1.64 billion compared to $2.9 billion a year earlier. Revenue was down 11 percent to $7.75 billion, compared with the analyst consensus of $8 billion, after taking a big hit on sales of Seroquel IR, the former blockbuster drug for bipolar disorder which is facing generic competition.
The company downgraded its earnings per share target for the full year from $6.15 to $5.85, the second downgrade this year.
AstraZeneca shares were down 4 percent at >27.23 in morning trading in London.
Savvas Neophytou, analyst at Panmure Gordon & Co., noted the Seroquel issue but said he was more concerned about a 1 percent drop in emerging market sales, where AstraZeneca has targeted double-digit growth this year.
The company also announced that Leif Johansson will succeed Louis Schweitzer as non-executive chairman on June 1, and would lead the search for Brennan's successor.
Chief Financial Officer Simon Lowth will step up to interim CEO until a permanent successor is appointed.
"We view this departure as another unsettling distraction for AstraZeneca, given the adjustment in management roles, at a time the group can least afford it," said James Dawson, analyst at Charles Stanley & Co.