Zabriskie Resigns As Pharmacia & Upjohn President And CEO

Last week John Zabriskie announced his resignation as president andchief executive of Pharmacia & Upjohn, in what was described as his wish to "return to the USA to pursue other interests." As a result, Jan Ekberg will leave his post as non-executive chairman of the recently- merged group to serve as interim president and chief executive until a long-term successor to Dr Zabriskie is appointed.

The news of Dr Zabriskie's resignation increased concerns about the company's future profits, analysts said, and signaled that the merger may not be living up to expectations. "We had two profit warnings last year, and I suppose maybe people are concerned that there's a third one on the way and that's why he resigned," said Janet Dyson of Merrill Lynch. Others, however, were not as discouraged by the drop in P&U's share price. The fall was unmotivated, explained Gustave Rhenman of the Swedish broker Ohman, since the company is in the process of "getting hold of its business." Dr Zabriskie's resignation does not affect that, he added. The move has also prompted speculation that there must have been a disagreement, since Dr Zabriskie is leaving immediately, said another analyst, who added that "clearly the merger has not developed according to expectations."

Yet other analysts believe Dr Zabriskie's decision could indeed have been prompted by personal reasons, and noted that, after all, he is an American now based in the UK. "If it comes out that he is going to another company, then it's entirely natural and the slide (in the shares; see also page 9) is completely unmotivated," said Stefan Wikholm of Handelsbanken.