AstraZeneca has 'tremendous operational challenges' Ahead of the company's annual general meeting and first-quarter results on Thursday, the top five investor said the company faced an uphill battle in developing a new pipeline of drugs that would not only pass regulatory hurdles but sell well in a tough trading climate. Other headwinds include seeing staff through a major restructuring programme over the next three years, resulting in thousands of job losses, and pricing pressures in Europe, where it has become increasingly difficult in recent years to sell drugs to austerity-hit health authorities. However, the shareholder, who asked to remain anonymous, said he was confident Pascal Soriot, the new chief executive, had stamped the right mark on the ailing drugs maker and was the right man to lead the business through various headwinds. On his first day in office last October, Mr Soriot suspended the share buy-back and within months, announced he was restructuring research and development operations and consolidating drug development work in three major centres in Britain, the US and Sweden. The former Roche executive, who is also moving the group's headquarters to Cambridge from London, has made it clear he intends to drive growth at the company through internal R&D, with some smaller bolt-on acquisitions, rather than a "disruptive" major takeover. The shareholder said: "AstraZeneca has tremendous operational challenges. The company needed to recruit a high-quality CEO against the background of weak results, and Soriot has stamped his arrival reasonably well so far. He said he had confidence in Mr Soriot's strategy of "organic" R&D growth rather than attempt large-scale takeovers; in 2007 the drugs maker made a "very expensive acquisition" of MedImmune, which has so far failed to deliver. "As ever, the execution will be the key to success, with a bit of luck in biological development," he said. Analysts consensus for first quarter sales is at £6.5bn, compared with £7.3bn over the same period last year. Despite the drop, the shareholder said there were no plans to block the company's remuneration report at the AGM. Mr Soriot was awarded a total pay package worth up to £11m in 2012, including a one-off "golden hello" payment of almost £1m to compensate him for the loss of his bonus at Roche. Last week, the Local Authority Pension Fund Forum said it would vote against the company's pay policy on the basis it disagreed with "golden hellos." But the shareholder said: "We don't like golden hellos, or golden goodbyes, but in this case, it has to be invested back into AstraZeneca shares. This is a better alignment of interests.