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Drugs chief appointed new head of Zeneca

Andrew Yates
Friday 22 May 1998 23:02 BST
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ZENECA yesterday unveiled a succession plan which will see Dr Tom McKillop, the 55-year-old head of the group's drugs division, succeed Sir David Barnes as the chief executive of the pharmaceutical giant.

Sir David is to become non-executive chairman of Zeneca from next May, replacing Sir Sydney Lipsmith who is stepping down.

The move ends months of speculation that Zeneca could appoint an outsider to replace Sir David. The decision to seek an internal appointment was interpreted in the City as meaning that Zeneca would remain determined to hang on to its independence despite the trend towards consolidation in the drugs sector.

Sir David, 62, has lead Zeneca with distinction ever since it was hived off from ICI in 1993, presiding over a four-old increase in its share price.

A Zeneca spokesman said: "He has a reputation as a gentleman and successfully demerged Zeneca which was no easy task and then grew the company rapidly ... which is the mark of the man."

One leading analyst said: "He was a nice old chap who took the group forward strongly."

However the appointment of Dr McKillop, who has headed Zeneca's pharmaceuticals division since 1994, was treated with a mixed reaction by the City. One analyst said: "This is an uninspiring move and means nothing has changed at Zeneca. Sooner or later it needs to do a merger. [Dr] McKillop has been criticised for lacking vision and concentrating on growing existing products rather than looking for new ones."

Other analysts questioned whether Sir David could resist the temptation to interfere with Dr McKillop's new responsibilities after his long tenure at the head of Zeneca. But the group yesterday insisted the two executives would have clearly defined roles.

Meanwhile at its annual general meeting Zeneca warned that the strong pound would cost the group pounds 110m this year, pounds 20m more than it forecast in March at its annual results meeting. Zeneca also cautioned that poor spring weather in Europe has meant the group's agrochemical business had got off to a slow start. The statement caused Zeneca's shares to slip 10p to 2530p.

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