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Governments can generally kick out bosses they dislike. Politics beats market economics. The test for Pascal Soriot, chief executive of AstraZeneca, is more complicated. Here, a political faction is counterbalanced by public health. The distrust and outrage of some EU lawmakers must be weighed against the UK-Swedish company’s significant but sometimes shambolic contribution to defeating coronavirus.
Seen through that lens, Soriot’s position looks less precarious — with caveats.
In his career, Soriot has made two big gambles that have largely paid off. The most recent was forging a non-profit partnership between his company and Oxford university to produce a jab. Serious doubts over its efficacy and safety are in abeyance. More than half the 28m Britons vaccinated so far are thought to have received it. Thousands of people have avoided infection, some of whom would have died.
Soriot’s earlier bet, when AstraZeneca was facing a patents cliff in 2014, was that he could accelerate development of novel drugs. The company succeeded, particularly in cancer treatments. The shares are about 15 per cent above the inflation-adjusted price that Pfizer unsuccessfully bid back then.
But AstraZeneca is unlikely to hit the sales target of $45bn by 2023 baked into its bid defence. That reflects a characteristic flaw of its charismatic boss: a tendency to overpromise. His bullish forecasts for vaccine deliveries are one reason he is in trouble with EU leaders. Their plans to impose export curbs reflect supply problems with the AstraZeneca shot, 29m doses of which were “found†stockpiled in Italy recently.
EU hostility reflects dishonourable motives too. The failure of the bloc to mount a vaccination programme as effective at the UK’s has angered voters. Getting tough with a UK-based business is a good way to deflect blame.
At the same time, the AstraZeneca jab has provided a shot in the arm, literally and metaphorically, to British prime minister Boris Johnson. That buys Soriot a lot of political cover in the UK, provided he cannot be blamed for any vaccine problems there.
The other caveat is that recurrent data concerns must be laid to rest. White House medical adviser Anthony Fauci has accused AstraZeneca of an “unforced error†in its disclosures. The credibility of drug companies’ bosses depends crucially on accurate trial results. Not even the opinions of politicians matter more.
The Lex team is interested in hearing more from readers. Please tell us what you think of the dispute in the EU over AstraZeneca in the comments section below
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