AstraZeneca puts share buyback on hold, awaits new CEO's plan
By Paul Sandle, Reuters
October 3, 2012, 12:06 am TWN
LONDON--AstraZeneca has suspended its share buyback program, giving its new chief executive room to step up investment and make acquisitions as he draws up a plan for returning the Anglo-Swedish drugmaker to growth.
The company, which has suffered a string of clinical trial failures and faces patent expiries, said on Monday it was halting the program after buying back shares worth US$2.3 billion of its initial target of US$4.5 billion.
Shares in AstraZeneca fell as much as 2.7 percent following the announcement.
They were trading 1.4 percent lower at 2,913 pence by 1505 GMT, the biggest decline on the UK's benchmark FTSE 100 index.
The company, however, maintained its core earnings target for the full year at between US$6 and US$6.30 per share.
Chief Executive Pascal Soriot, who was previously at rival Roche Holding, started at AstraZeneca on Monday.
"As I assume my new responsibilities at AstraZeneca, I believe this is a prudent step that maintains flexibility while the board and I complete the company's ongoing annual strategy update," he said in a statement.
An AstraZeneca spokeswoman said the board could decide to resume the buybacks or it could identify other opportunities for business investment, such as acquisitions or in its own pipeline.
"It's about maintaining some flexibility from a financial point of view," she said.