Pascal Soriot says "climate change is the biggest threat to humanity” and discusses future-looking strategy with Alexion acquisition in exclusive interview on company’s turnaround....
The chief executive of AstraZeneca has underscored the importance of multilateral cooperation in the fight against COVID-19 as well as other systemic global challenges such as climate change, calling global warming “the biggest threat to humanity”.
In a wide-ranging and exclusive interview, Pascal Soriot expressed unease over what he saw as an excessive focus on Western nations in the context of vaccinations. He told IMD’s President Jean-François Manzoni: “The whole discussion is about [the] US and Europe, but there are 7 billion people outside of those two regions.”
His comments come as the Delta variant that first emerged in India and has rapidly become dominant across the world takes a devastating human and economic toll on developing countries.
As economies in Europe and the US start to reopen with large numbers of their populations now immunized, many poorer countries with low vaccination rates are being left behind.
AstraZeneca has now reached the 1 billion milestone, supplying vaccine doses to over 170 countries. As of the end of June 2021, AstraZeneca had supplied around 90% of the doses for COVAX , the multilateral equitable access facility, with the majority distributed to low and middle-income countries.
Soriot said his values, which have underpinned his leadership roles throughout his career, shaped the decision to deliver a vaccine for the world. “We decided to do this because we thought from time to time, when people call, you have to answer ‘yes, I’m going to help’, right? We are in a world that is give and take, and when you can help, and if you have an opportunity to help, you should not say no.”
Climate change is the biggest threat to humanity. I don't think everybody realizes the sense of urgency that is required to address it.
At a time when rival pharma companies are expecting tens of billions of dollars in vaccine revenue this year alone, Soriot said he hoped to do good by delivering a jab at no profit for the duration of the pandemic. AstraZeneca, which did not have a traditional vaccines business, partnered with the University of Oxford to manufacture and distribute a vaccine at cost.
The 62-year-old Frenchman said the Oxford/AstraZeneca shot, which can be stored and transported relatively easily, is playing a significant part in the vaccine rollout, particularly in the developing world, as it’s effective at preventing severe disease and death.
“Without our vaccine India would have been a real mess. It’s a terrible tragedy, but it would have been even worse than it has been,” Soriot said. Brazil is another example where the majority of doses administered have been of the Oxford/AstraZeneca vaccine.
But, despite the impact it is having across more than 170 countries, the shot that once seemed like a panacea in the pandemic has faced a series of obstacles, especially the rare and blood-clotting side-effect which has made some countries cautious about using the vaccine.
Soriot insisted that “I have zero regrets” about the jab: “We’re the third largest supplier in the world. We’ve had a big impact in many, many countries. We’ve saved tens of thousands of lives…Economies have restarted early in many countries because of the vaccine.”
Recruited from Roche in 2012, the MBA graduate of HEC Paris has spent the past decade leading a transformational turnaround at AstraZeneca, the Anglo-Swedish biopharmaceutical company. “Re-injecting a little bit of entrepreneurial spirit and risk-taking was key to our success,” he said.
Allies thought the career move was “suicidal”, since the company faced sharp revenue falls as patents for blockbuster drugs expired with few replacements in the pipeline at that time.
Soriot refocused AstraZeneca on oncology (prevention, diagnosis, and treatment of cancer), as well as drugs for cardiovascular and respiratory diseases. He also invested heavily in research and development to rebuild the pipeline and drive revenues lost from drugs going off-patent.
That strategic revamp saw him divest a number of non-core businesses, including the sale of its small-molecule antibiotics business to Pfizer in 2016. Soriot also cut costs by reducing headcount.
He is clear that the main challenge was winning hearts and minds inside the company. Several drug failures in later stage development had made the organization risk-averse, along with the acquisition of US biotech company Medimmune, which many investors saw as a failure.
“When I arrived, the projects were going around and around in phase one and two because nobody wanted to take a risk,” Soriot said.
He has reaffirmed AstraZeneca’s status as one of the world’s leading pharma groups, with a portfolio of successful cancer drugs including Tagrisso, Lynparza and Calquence. Today, the company’s market capitalization stands at around $150 billion, and under Soriot’s leadership the total shareholder return increased by 284% from 1 January 2013 to 30 June 2021.
He feels vindicated in his decision to rebuff a $100 billion hostile takeover attempt by Pfizer in 2014 that would have netted him several million pounds, saying the approach was a blessing in disguise: “It unified the company. It gave people confidence. It gave people energy, which stayed with us for months and years after that.”
In addition to those moves, Soriot is making sustainability a priority for AstraZeneca, as climate change — already harming human health — is linked to a rise in chronic conditions such as heart disease, stroke and lung cancer.
We are in a world that is give and take, and when you can help, and if you have an opportunity to help, you should not say no.
In January 2020, the company launched a $1 billion “Ambition Zero Carbon” plan, aiming to ensure its entire value chain is carbon negative by 2030. Since 2015, it has reduced its greenhouse gas emissions by 60% and water consumption by 20%. It’s also boosting renewable energy sources and transitioning to an electric vehicle fleet, while committing to reforestation.
AstraZeneca is also a founding member of the Sustainable Markets Initiative (SMI), led by HRH The Prince of Wales, which works to accelerate sustainable investment. Soriot was formally invited to participate in the recent G7 Summit in Cornwall, UK to discuss the climate crisis with world leaders.
Soriot, married with two children, points out that efforts to decarbonize commercial activity are a matter of survival. “I have a grandson, and maybe I’ll have more grandchildren at some point, and I want to leave them with a world they can live in,” he said, adding that “climate change is the biggest threat to humanity. I don’t think everybody realizes the sense of urgency that is required to address it.”
He said that the healthcare sector must do more, as it accounts for more than 4% of global greenhouse gas emissions. One area of focus for AstraZeneca is digital health solutions, accelerated by the pandemic, which have a lower environmental footprint and reduce the burden of ill health on patients, care providers and the economy.
While some leaders might prioritize creating short-term financial value, Soriot takes a longer-term view on sustainability: “It’s a substantial investment, and the return is over a number of years. So you have to be patient.”
When it comes to healthcare, the CEO has heightened AstraZeneca’s focus on immunology, and experimental drugs to target rare diseases. As part of that drive, the company has acquired US biotech group Alexion, in a $39 billion deal. Alexion focuses on a part of the immune system known as the “complement cascade”, which boosts the ability of antibodies to clear microbes and regulates the body’s inflammatory response.
“The technologies we have … we can generate new products for rare diseases,” said Soriot. “There are hundreds of rare diseases in the world. Most of those have no solutions, no options, no treatment.”
While public health systems have warned of rising healthcare utilization and costs as they grapple with ageing populations, he is clear that the typically high prices for drugs for rare diseases are necessary to fund R&D to discover fresh solutions. “There will be pressure, but I think society recognizes that innovation is key and innovation has to be somehow rewarded, otherwise it dries up.”
Furthermore, he believes that preventative treatments may lower overall healthcare resources and costs in the long run by taking some of the pressure off hospitals: “The cost of a drug in most countries is … 15%, maximum, of the total healthcare costs. So it’s a small cost overall that people focus a lot on.”
Born in France in 1959 and raised in the banlieues of Paris, Soriot is characterized by determination, fortitude, and curiosity. A nature-lover, he started out his career as a vet, where he picked up values such as dependability, he said. “If you’re out there in the middle of winter and in a cold part of France and you have in the middle of the night to do a caesarean section on a cow, you have got to be really self-sufficient.”
His wanderlust led him to business school, and he went on to work stints in New Zealand, Australia and Japan for Roussel Uclaf, a French pharma company, between 1986 and 2000. He then held various roles at Aventis from 2000 to 2006, including US chief operating officer.
In 2006, he joined Genentech, and helped lead one of the sector’s largest and most difficult integrations with Roche in 2009. He explained that the success of the deal hinged on the ability to convince resistant Genentech staff that he would integrate the business rather than bulldoze its culture. “That’s the only thing I did, no other thing, talking to people, convincing them to stay.”
His career is notable for the numerous M&A transactions he’s been involved with, and Soriot sees leading change as a critical leadership skill in today’s business environment. “I think what you have to have is curiosity, flexibility, adaptability, and really a positive outlook on life,” he said in response to a question about surviving changes of ownership. “I mean, change is an opportunity. If you see change as a threat, you’re not going to do well.”
Soriot reflected on advice shared with him by AstraZeneca chairman Leif Johansson, about putting challenges into perspective: “Remember that tomorrow morning, the sun will rise and a new day will start. Even when the day is a bit dark, think about tomorrow morning. That’s what you’ve got to keep in mind when you’re going through tough times and lots of friction — it will resolve itself, stay true to your plan.”
The interview was conducted on 9 July 2021.
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