Shire shares dive 10% as chief departs

Shire Pharmaceuticals announced yesterday that its long-standing chief executive, Rolf Stahel, will stand down as soon as the company has found a successor who can propel the company into the global pharmaceutical big league.

The shock news of his intended departure sent Shire shares spiralling more than 10 per cent lower to 493.5p.

A spokeswoman for the company said Mr Stahel reached a mutual agreement with the board to step down from his post. The sudden timing of the announcement, however, only a week ahead of Shire's third-quarter results has led analysts to suspect Mr Stahel has lost out in a boardroom tussle. "Shire's future prospects are strong," Mr Stahel said. "After leading six mergers and acquisitions and with the successful launch of Adderall XR this year, I now believe this is the right time to prepare to hand the company over to a successor."

The board said it is now starting a global search for a new chief executive, but it has set no time limit for having a successor in place. Ronald Nordmann, a US-based non-executive director of Shire, said the board was looking for a new chief executive more experienced in running global pharmaceutical companies who can help the company achieve its growth targets.

Analysts believe Shire will not struggle to find a replacement for Mr Stahel, given the growth prospects of the company. Shire has been tipped as a front runner in the bidding to take over Powderject, the vaccines maker.

"There probably needed to be a change at some point, given that the company has become a lot bigger and it really needs someone with a global pharmaceutical background," Howard Miller, a drugs analyst at Teather & Greenwood, said. Mr Miller believes a takeover of PowderJect would make sense for Shire, which is showing signs it wants to expand in the vaccines area with its deal announced this week to supply and sell drugs with European rival Berna Biotech.

During Mr Stahel's eight years of service with Basingstoke-based Shire, the company has seen annual sales grow from £2m to £603m at the end of 2001. The company has a market capitalisation of £2.4bn.

The group's chairman, Dr Cavanaugh, said yesterday that the group would continue in the same vein with a new chief executive in place.

"Shire has a strong product pipeline, a deep and capable management team, a highly skilled staff and a first-rate salesforce, so we are quite optimistic that we will have a new CEO in place early next year," he said.

Shire provided revenue and earnings guidance in August and yesterday reiterated its expectations for revenue growth in the mid to high teens and mid to high single digit earnings growth compared with 2001. The group's third-quarter results will be announced on 6 November.

Mr Stahel, 58, joined as chief executive of Shire in March 1994 and has a pay package of £700,000. Discussions to end his career with the company began in June and he is now negotiating a pay-off with the board.

Tensions on the board are understood to have been raised earlier this year over whether to issue a profits warning on its best-selling drug Adderall. Shares of Shire have fallen 55 per cent in the past 12 months because of fears that Adderall will be hit by competition from rival generic versions.