How a Purpose-Led Culture Transformed AstraZeneca (with Pascal Soriot)

Thank you, Philip. And it's a pleasure to be with you and it's certainly a pleasure to see you again.

Yeah, I must say I didn't expect that question but this story has sometimes been a little bit inflated by the media but it is true that I grew up in a difficult suburb. But I had a very happy youth and my parents really were great parents. I had three brothers. They're doctors. So you can see that everybody has done well in the family. But we didn't have much money actually. In fact for instance I always loved horse riding. I love horses. I've always loved horses since I was four or five. But I could never ride a horse until I could pay for riding lessons on my own. I was 18 or 20. But yeah, we were kind of fighting not so much to defend our turf as you said, but more to help each other. And I learned suddenly the value of team spirit. And the real team spirit, not talking about it, but being there for your friends, your mates as they would say in Australia, when time is difficult. And so I learned that very early on. And I also learned another important lesson, which is never start a fight you think you're going to lose.

Well, actually my father lost his father. So he basically grew up with his mother just after the war. And for some reason which I don't exactly know, he wanted to study and then joined the French Navy but in the end because he himself didn't have much money he had to work. So when he finished his studies, he studied and was able to finish his studies post war and then joined the French administration. And he worked for the French treasury. And I can tell you sometimes people think employees of the state don't work hard but I saw my father work so hard to the extent he one day experienced a heart attack but he was working incredibly hard. Maybe different times, I can't judge today, but certainly people working for the state actually in those days were working very hard to the extent that a few times he had people in his team that were missing and he was enrolling us to do some of the work that his team could not do. And I still remember working for the state myself. I was 10. Yeah, I was I guess 13, 14, 15. So you know, I think again our parents taught us the value of hard work and I think it was general in those days people who had lived the war. I grew up in the northern part of France of course and the war was a real event for those people and they suffered a lot from the war and they really wanted their kids, their children to live a much better life. So everybody was working very hard to build a better life and a better life for their kids. So that was my mother, stay at home because she took care of four boys. That was a full-time job and I'd argue she did a reasonable job because everybody got a reasonable job. So but you know we had a happy happy youth but certainly out in the street it was not always easy every day for sure.

Yeah. One thing that I sometimes tell people, you know, I think growing up in an environment that is not rich where you struggle a little bit is not necessarily bad. It can be a godsend. Now, if you live in a very very poor neighborhood and you cannot study, I mean going to school is difficult and it's really hard. But if you experience hardship when you're young, I don't know that it's necessarily bad. Certainly was not bad for us because it gives you the energy or the... Yes. You want to work hard, you want to do better and essentially when you're in an environment like this, the only way out is school. That's why school is so critical in any country especially lower school because that's really where you actually make a difference and learn the values that you need to have. And so I often think that growing up in a rich family or well-off family is not necessarily a godsend. I mean you can do well there too of course but you know having a little bit of a struggle in life actually can help you.

Yeah, I wanted to be, I loved horses when I was very young and I wanted to be a vet when I was four or five years old. Many kids actually want to be a policeman, woman or vet or fireman as well. Those are very popular jobs when you're very young and then often kids lose that as they grow up. I didn't lose that. I finished high school. I was very young. I was 16 and so I went to prep school, university if you want for international listeners. So I went to university. I was 16 and I actually was absolutely convinced I knew what I wanted to do. I wanted to be a vet and in reality I didn't know. I thought I knew but I didn't really know. So I became a vet and started working in a horse practice. I did this three years and then my father died. And so I had to, well sorry I finished my studies. Apologies. My father died and then I worked for three years. I had to work because my brothers were still young and my mother didn't work at the time. She found a job later on but at the time didn't work. So I had to work and then help the family and as soon as my mother found a job I went back to business school and went back to HEC in France. And did an MBA and then joined the industry. And the reason I did this is you know I became more and more interested in the business world even though I had no clue about the business world. Nobody to guide me. I was sort of guiding myself. And so you know I essentially I still love horses. I still love animals but and I'm still a nature lover I have to say but I didn't want to spend my life at the same place. So I decided to do something else. And because it is really something that has I guess driven me my entire life. So I was curious and went and did this. But I think this education helped me. It helped me in two ways. First of all science, you know I mean you learn biology. So I learned biology. And then secondly I think vets are people who have to be self-sufficient. You know, you really are on your own and you don't have a lot of support. So, you have to be self-sufficient, you have to be flexible, you have to move quickly. So, maybe that's also something that the job taught me at the time.

Yeah, I mean a couple of things before I answer directly your question. I mean a couple of things I've learned over time is the importance of curiosity and the importance of pushing yourself outside of your comfort zone. I actually finished business school and I joined Roche in Paris originally as a financial controller which was a first step outside of my comfort zone. I always was good in math and physics and I love math and physics. So finance is not that far away. It's all about numbers of course. So that was a first step and then very quickly I was sent to New Zealand to be a rep. And that was clearly a stretch for me because my English was suddenly difficult, you know, was beginning let's say because in those days you know I learned German. I mean good students in those days in France they were learning German as a first language not English. So my English was a bit broken I have to admit so that was difficult with my wife and the kids we had never left France so going down under so far and New Zealand in those days was not the New Zealand of today. You know, we didn't have nappies for instance, you know, I mean, we didn't have nappies. We had like tissue nappies that you had to clean as an example. So, for my wife and I it was a bit of a surprise. So, it was a challenge. And then I moved to Australia. I was sent to Australia. Then I went to Japan. Then I went to New Jersey for Aventis. At the time I became head of US commercial and then Sanofi head of US commercial and then I joined Genentech in California. And I think really the defining moments for me are probably number one going down to New Zealand. Because it was a bit of a stretch. I still remember in those days lying in my bed at night looking at the ceiling and thinking what am I doing here with my family with my terrible French accent and all those... that was tough and you know in those days they were still doing morning tea and afternoon tea in the office like in the UK and then they speak English of course with their New Zealand accent. I'd go home at night with a terrible headache trying to understand what they were saying. So that was like a really you know what you might call a teaching moment. And so that and then I often think you know operating in a small organization teaches you a lot because I had to do everything. And so you become a jack of all trades and you learn a lot. So I learned a lot. You're an entrepreneur. Yes. You become an entrepreneur. I mean I was running a small business. I knew exactly how much money I had to make every month to break even because the company was not making money. I was counting my dollars every month. So you become an entrepreneur you know how a biotech entrepreneur or any startup entrepreneur thinks and operates right. So I learned all this. The other big defining moment, I mean three defining, another one was to go to the US because the US was like a huge learning experience and you know being thrown out in the US organization having a managing an organization with maybe 10,000 sales representatives at the time we had 12, 13,000 people in commercial and the only place we could have a national sales meeting was Vegas. There was not enough play nowhere else you had a large room. But probably the most important one was Genentech because I really learned and I working there. I mean I worked with people who are like so smart and you know you kind of see what top talented people actually can do. But also the most important is I learned the shared purpose. The value of shared purpose. I mean everybody at Genentech, the shared purpose at Genentech was so deep and so strong.

And I'm sure it's still the case. What it was, you know, science and patients. It was really, you know, people understood fully why they were doing what they were doing. You know when you work in the industry and you can think okay I'm selling pills or I'm selling whatever I'm selling, medicines, and so you look at your market share, your sales and but and of course you think of patients but the connection was so strong and the belief was so strong people actually would give up some of their budget sometimes in global function in admin functions or anywhere else to be able to reinvest in R&D because everybody was so convinced of the mission that everybody was working on. So I think this shared purpose and the importance of making sure everybody actually is on the same mission is critical. You know, I think it's Kennedy or someone who said, JFK I mean who said a long time ago meeting someone who was on the cleaning team at NASA and said what are you doing and the person answered I'm a janitor and the person answered I'm sending rockets on the moon. And of course you can see it as an anecdote but actually it really captures completely the spirit that people had at Genentech and I assume they still have it. I don't know but it was very very strong at the time.

Yes, you know, I think since we talk about positive leadership and before answering directly your question, the other thing I learned along the way which I brought, I integrated in the way I operate is and I'm not perfect. So I'm not sure that I practice that all the time, but it is to always assume good intent. And always assume everybody is actually doing their best. And that's really key, right? If you want to build a positive environment and a team that works together towards a common purpose. But you know I'm not a believer of a CEO that comes in and fires half of the people and say well you guys what you guys are doing is really bad and we're going to change it completely. I'm not a believer in this. As in going through a tough patch as you know because you were on the board. That happens to companies. And my approach was always because I was influenced I guess by the image that I had of AZ when I was in Australia. I had a very positive image of the company. And I had met a number of people along the way over the years. My approach was even though the company's going through a tough patch there, and I'm sure there's quite a number of very good people in this company. So you know first thing we did was to try and focus our strategy on a few limited priorities. That is I guess simple if you want, the difficulty is to do it because it actually meant that we had to bet and I'm sure you remember that being on the board again but we had to bet on what we were trying to do and we had to fund it. We had to put money in it because we were running out of, I mean profit was crashing very quickly. I mean when I joined the company was selling $30 billion and we were on a rapid decline and the forecast was we would drop all the way down to 17, 18 billion and we did drop because we lost several big products to patent expiries. And I think we were able to stabilize the company down at 19 or 20 billion before we started growing again. But through this journey, we had to sell old products to reinvest that money into R&D. And so you know saying you're going to focus and then you have to resource your priorities, textbook business school easy to do to say, difficult to do because the way to do it for us was to sell old products, take the profit, put it into R&D but there was no guarantee of success in the R&D investments. So we lost the profit coming from old products and if R&D had not delivered we were finished. And certainly I was finished also, AZ was finished. So you know we actually decided to set a strategy that was focused on oncology, cardiovascular disease at the time and respiratory disease and left it at this and over time we built an additional leg, rare disease. Through the acquisition of Alexion. But essentially we've kept focused on this and following the science, betting on good science and I'm not saying we were successful all the time. We also had a few setbacks but the important piece was over time to continue building the team. Not sort of fire everybody or half of the team, but really take the team as it was and you know good people and over time really continue to increase the talent on the table and across the company. Like I often think about it as a sports team, a football team or basketball team, whatever kind of a sports team you think of, you continuously have to strengthen your team if you want to go from regional championship to national to international.

Yes, I mean AstraZeneca was I think still living the sort of mantra of the pharmaceutical industry of the 2000, 2010 period and a little bit after which was everybody was saying you know pharmaceuticals is like consumer goods. It's all about marketing. And of course you know even if you have a good drug you have to make sure physicians understand the value of medicines and know about it otherwise they can't use it. But it was excessively, the whole industry I have to say was very focused on marketing. And that didn't help the image of the industry for sure but also I think the industry lost its focus a little bit. And when I was at Genentech because I was at Genentech originally and then we merged with Roche and I became the head of pharma for Genentech. You know in the late 2009, 10, 11 before I left I was because Roche and Genentech were focused on science and pipeline, investors were not very convinced. They were saying well the age of science, the time of products and pipeline are behind. I mean you really, the industry, I heard this many times, the industry is spending too much in R&D. And when I joined AstraZeneca I was told this almost at every call because or not every call but many calls because people saying you put money in R&D but your R&D is not very good so you're not going to produce anything. So what we did from the beginning was transition from this sort of marketing era to science and patients. We integrated this in our values. We integrated this in our messaging. And really it was about we focus on science. We put patients first. We're entrepreneurial which means we take risks. In our industry you got to take risks. If you don't take risks, basically you're just going to be plodding along, right? And maybe even decline. If you take risk and if you fail, then of course you're in trouble. But if you succeed, you can actually do very well as a company. But risk taking is associated with innovation and breakthrough science. So we focused on science. We focused first on the connectivity to patients and patient benefits and then taking risks. Because one of the things that had happened at AstraZeneca is the company bought in 2008 or so they bought MedImmune, a biologics company in the US, UK. And they were criticized at the time for overpaying. I think it was actually a good decision quite frankly whether they overpaid or not I mean you know who knows, debate. But at least they had the asset. But they were criticized for this then three phase three projects failed which were going to be big projects and I'm sure you remember that period too. And the management told the team we will not fail in phase three anymore but actually if you tell the team that what happens is you never fail in phase three because nothing moves into phase three. When I arrived, there were a couple of products that were in phase two and the team wanted to do more work in phase two and more questions because they were so nervous moving it into phase three. We moved it into phase three and it worked. Of course, it could have failed but it worked because I thought at the time this product has a good chance of success. So the risk taking and then moving to science and moving to you know we are here for patients. Time matters. We have to take risk to come up with products that make a difference for patients and time matters because patients are waiting. I mean especially in cancer if you think about it. If you come up with a product that gives patients only two years of extra life people say okay well you know you pay a lot of money for two years of extra life. First of all I will argue if you're the patient it actually means a lot, matters. You know, you can see your son or daughter graduate from school. You can do all sorts of things. But the other thing is science in our industry is moving at full speed. Surviving an extra two years may give you a chance to get to the next drug that will either cure you or give you an extra five years of life. So, you know, and time matters because if your product arrives too late, then some people are going to miss out.

Yeah, it's a great question and in fact we at the time I must say also Pfizer was very much focused on the financial aspects and the Pfizer of today is very different from the Pfizer of the time. Pfizer of today is a lot more focused again on innovation. But at the time when they approached us it was really about financials and tax savings etc. which of course I mean none of those things excites anybody who is committed to making a difference to patients through science right. But we had already sort of spent a year and a half roughly a year and a half right on our strategy on our part on our pipeline on our science and there were a few early shoots, is that the right expression, early shoots, attempts, of early signs that we are making progress in the right direction. We had a product in particular. We had a product called Lynparza for ovarian cancer, breast cancer that we had relaunched because you know the management before had decided to stop it. And we restarted it and it became Lynparza which is a multi-billion dollar product today and is helping a lot of patients. But at the time was in the early early phase and moving nicely. And we had a product called Tagrisso in particular for lung cancer. And I was convinced that you know a merger can work well by the way. But I was convinced this one would actually totally distract us and disrupt the process of development of Tagrisso because in those days we didn't have much. So we were 100% focused on the few products we had in the pipeline and you know everybody in the company was sort of in charge of Tagrisso if you want because it was such a critical product. And I thought we're going to be distracted. So I didn't think it would create value and I thought we can do well or better on our own and our chairman and the board were of the same conviction. Right. You say it could have failed. We could have all been wrong. Right. Yeah. Yeah. But it worked because in the end when I joined the share price was 29 or 30. When Pfizer approached us we were approaching 38 or 40 and they made an offer and increased it and I think they finished around 55 pounds at the time. And today we are around 140. So yeah. So we hopefully have shown that the story is told. And one quick, it was a stressful experience for everybody right. I spent and I'm sure it was the same for you on the board you remember how many board meetings we had like every day every night it was another call. And if you have to kind of take away one big leadership lesson you took at a time is it like hold the line when you have a deep conviction and just hold the line. I don't know I don't want to put my words into your mouth. Yes. I tell people, you know, in the end, you've got to listen to everybody who has an opinion to give you, an advice to give you. You listen. I think listening, being open-minded, listening is key. And that's what I do all the time. I listen to many, many different people. Ultimately, if you're in charge, you're going to make up a choice and a decision. And you got to go for it and stick to it and rally people behind you because

Yeah. Can I... It's a great question actually. Jean-Philippe, can I go back to the FISA story and say one last thing maybe quickly because I think it's also, again, it talks about pushing yourself out of your comfort zone. When FISA approached us originally, the British government was in favor of the proposal because they had sort of been told and believed that the headquarters were going to be in the UK, so they saw that's not a good deal. But rapidly, and that was also helpful because of our focus on science, but rapidly the scientific community rallied behind us actually. And we ended up, yeah, created of course a political discussion, debate. And we ended up having FISA to testify in front of Parliament. We had a Parliament inquiry.

You remember that? Yeah. And you know, I was shaking when I was going there because I was thinking the little guy from the northern part of France who grew up in a low-cost housing suburb going to Parliament in London. But in the end, we could have said no, we don't want to participate, but I thought we have to go because we have to tell our people, our story to everybody. And it worked again. But I went there with two scientists, a woman and a man, who accompanied me and I'm sure still remember that story being in Parliament. And we of course were questioned, but I think it's another example of you got to push yourself. And then, you know, take your chances really. Going back to your question now about COVID, you know, throughout all of this, I think all of this FISA story and then, you know, the turnaround, the journey we went through, first of all, I think we had a very strong board, very cohesive board. And that's important, right? Because when you make a difficult or challenging decision, you take a risk. Let's say you have to have cohesion in the board.

Number one. Number two, we had a team, a management team, leadership team that was also very cohesive. And number three, I think we had, suddenly I had and many people on my team had developed a sort of emotional connection to the UK. And so we wanted to help. So before going into the COVID vaccine, we actually built with the University of Cambridge a testing center in Cambridge.

Because you remember initially there was not enough testing. Everybody needed to be tested, right? There was not enough testing centers. There was like this huge effort throughout the UK, a little bit like during the Second World War when they had this flotilla of boats going to France to rescue all the army and bring them back to the UK. Right. So it was, you had small centers, big centers doing testing throughout the UK and everybody was working together. It was an incredible time. And then of course in parallel to this we worked on the vaccine. We did it at the time, and I know some people don't believe it, but we simply did it because we wanted to help. And we helped initially with masks in January of that year. We then looked at our medicines, is there anything we can repurpose. We developed an antibody for COVID treatment, COVID prevention for people who don't respond to vaccine. And then we started working on the vaccine with Oxford. And quite frankly, I think even though we were criticized at the time a little bit here and there for not being able to supply everything in Europe, in particular if you look at the emerging markets, it was a resounding success.

Actually, we delivered three billion, three billion doses of vaccine.

And it was estimated independently from us that this vaccine saved 6 million lives. 90% of people in India were vaccinated with our vaccine.

That we developed in partnership with Serum Institute of India. You know, in many countries, Brazil, etc., 60% of people got a vaccine in Vietnam, Thailand, all these places. So Latin America, South Asia, all these places, they really relied on our vaccine because at the time there was no vaccine except the Chinese vaccines. Because the US was keeping what they had for themselves, which, you know, you can understand, there was not enough for the US population. And Europe was keeping everything for themselves too because there was not enough for Europe. And they started exporting or sharing, if you want, but later on, they shared when they had enough for themselves, which was several months later. But think about a country that has access to no vaccine, every day counts for the population but also for government because the population tells the government, what are you doing? I mean, look at France, the US, they're all vaccinating and we have nothing here. So, you know, it helped the populations and it helped everybody actually throughout. And you know, I can see even today, five years later, many countries in this so-called emerging markets, many countries are still thankful for what we did.

Also, because we sold the vaccine at cost.

We made no profit. So, the price was much lower and then they could survive.

The biggest what?

The value of a great team. The team, this is quite interesting at the time. I mean, my team and the board actually, but my team in particular could have said, what are you doing? I mean, why are we doing this? I mean, we have so many other things to do, it's going to be a distraction. In fact, some investors, some shareholders told us, you're going to be distracted. Going to be a big distraction while you're doing it.

And to the, you know, and my, there's not a single person on my team, not a single person who told me we should not do this. Everybody said let's do it. And honestly, often I think about it or even have some emotional moments about it because of the fact that everybody said let's go, let's do it. And again, it was not perfect. We gave it our best shot. We made a big difference in many parts of the world, not everywhere. But it was really, I mean, the learning was having a team that rallies. Because it's hard to describe. I mean, the amount of work that had to be done because we had to set up regional supply chains because we knew, I mean, we suspected and we were proven right from day one that countries would not share and they would capture whatever you manufacture in their country, they would capture it for themselves. And in fact, it happened with India. We had an agreement. 50% of the supply would stay in India, 50% would be exported. And in the end, COVID exploded in India and they said, no, sorry, we keep it for ourselves.

But we sort of had a big problem. But thank God we had regional supply chains in Southeast Asia, in Latin America, in different places, so we could continue to supply.