While defending itself from US biotechnology giant, Pfizer, AstraZeneca (LSE: AZN) (NYSE: AZN.US) made an astonishing claim. The company claimed that it has the potential to nearly double its annual sales during the next 10 years.
Many City analysts expressed alarm at this forecast, calling it unreasonable. However, the company has a secret weapon — none other than CEO Pascal Soriot, the man who made the forecast in the first place.
A man on a mission
Pascal Soriot has been described by some analysts as a pharmaceutical industry war veteran. He joined the industry back during 1986, holding several posts at Aventis, which later merged with Sanofi, after which he moved to Roche.
However, before heading over to Astra, Soriot took charge of a company called Genentech, one of Roche’s acquisitions, where he was charged with integrating the company.
Mr Soriot believes that Astra’s previous management team were too focused on costs and as a result they lost contact with both customers and the market. This culture, according to Mr Soriot, meant that treatments were only developed if they met commercial targets. If target markets were too small, treatments would be abandoned.
So, management’s new task has been to change this mentality and rebuild Astra’s reputation. With hefty investments in oncology, as well as embattled products like the blood thinner, Brilinta and fish oil Omthera, Soriot hopes he can reverse the impact of past mistakes.
A sticking point
Despite management’s optimism, analysts are still sceptical that Astra can double sales over the next decade — from $26 billion today to $45 billion in 2023.
Indeed, these comments, made by Soriot himself are widely considered to be too optimistic. To meet these forecasts, the company’s treatments would have to be some of the most successful to ever hit the market.
In particular, the company’s AZD9291 cancer treatments is expected to rack up sales of $3 billion, one of the few treatments in the world to rack up sales of this volume. However, 9291 is no ordinary drug.
For example, according to management 9291 is flexible and could ultimately be combined with two other treatments under development.
Specifically, 9291 could be combined with either the PD-L1 antibody, or the selumetinib treatment. Both combinations could result in a completely different horizon for the product.
Committed
Pascal Soriot and his management team rejected Pfizer because they believe that Astra is in the process of making a comeback. And it would appear that to some extent the company’s turnaround is already well under way.
Astra’s sales are expected to start expanding again during 2016 and 2017 and the company has a strong pipeline of treatments under development.
What’s more, Astra has put together a strong and committed oncology team, spearheaded by the company’s own CEO, which is focused on making an impact, not only chasing treatments just because they are likely to make money.
