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AstraZeneca drift doesn't alter income attraction

A failed attempt at suing the regulators reflects a company drifting
March 28, 2012

AstraZeneca has again been making the headlines for all the wrong reasons after a US court case over the introduction of a generic competitor to anti-depressant Seroquel went against the company. In the meantime, chief executive David Brennan saw his salary bumped up to £9.1m on the back of performance bonuses dating from 2008. But, despite the sideways drift in its share price, it is still attractive for income seekers.

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Recent underperformance compares unfavourably with competitors such as GlaxoSmithKline and is linked inextricably with AstraZeneca's constipated product pipeline. Its research base has been radically restructured but very little has made it out of Phase III trials and onto the market in the past three years. The options have narrowed to such an extent that the company has taken to suing the US Food & Drug Administration. This looked particularly desperate as the regulator's enhanced legal status makes it difficult to sue, precisely as a safeguard against this sort of industry pressure. This, combined with stories from inside the company of another round of mass firings in the aftermath of the Seroquel decision, and there is a palpable sense of directionless drifting at the firm.