What does that say about other drugs under development?The FDA panel which turned down Exanta raised a number of

What does that say about other drugs under development?The FDA panel which turned down Exanta raised a number of questions about AstraZeneca’s methodology in clinical trials, including its interpretation of some of the data. The shares have therefore suffered a double punishment in the stock market – once for the pruning of earnings forecasts now that there are to be no US sales of Exanta to buoy revenues, and again to take account of the possibility that there may be a systemic problem at AstraZeneca which could lead to further disappointments.Some big positions had been built up in AstraZeneca shares on the presumption of a positive outcome It will take a while before the damage is repaired. The superstitious might think history is about to repeat itself. Only this time around that seems so unlikely as to be virtually impossible. The mistake Sir Martin made with Ogilvy was to buy at the top of the market in cash, horribly overstretching himself in the process and making the enterprise highly vulnerable to any drop in the advertising market All his deals since have involved a high degree of equity.

There’s to be no second, near death experience.Sir Martin has also managed to prove the sceptics wrong in realising the dream of a global network of advertising and marketing services companies. Advertising is a people business demanding strong creative as well as business skills. In any such industry, diseconomy of scale is highly likely to outweigh any scale savings. Unlike accounting and investment banking, advertising has also traditionally found it hard to deal with conflict of interest.I’m not quite sure how he’s done it, but Sir Martin has managed to get the back office savings a global network can aspire to and keep the clients and the best of his people as well.

If you’d bought shares in WPP at the height of their glamour stock status just before the crash of 1987, you’d still be out of the money, such was the scale of the debt for equity swap Sir Martin was forced to concede to keep the company afloat. Few chief executives survive such a calamity.Interestingly, the share price graphic today doesn’t look so dissimilar to the way it did then – a bubble inspired peak followed by a steep decline, and then … in the early 1990s the price fell off a cliff as the enormity of the company’s financial difficulties became apparent. From these unlikely beginnings, it has taken Sir Martin less than 20 years to create the world’s biggest marketing services group. His former bosses, the brothers Saatchi, can only look on in amazement at the raw energy and determination that has made it happen.Along the way, there has been a string of acquisitions, one of which, Ogilvy, bought just before the recession of the early 1990s, nearly sunk both Sir Martin and his company.

It also makes WPP into the largest advertising group in the world by revenue.Sir Martin doesn’t like to make too much of this milestone. He’s only there by a hair’s breadth, and given the shifting fortunes of this industry, as likely as not his newly won lead over Omnicom of the US will be reversed shortly.None the less, for the time being, Sir Martin sits atop his industry, with all the others, as it were, spread out beneath him. That’s quite an achievement given WPP’s origins as a tiny manufacturer of wire supermarket baskets. Presumably, one or more of the dinosaurs of the US airline industry will eventually be allowed to keel over and die. But there is still an awful lot of pork barrel politics involved in this industry, and there doesn’t seem much appetite even for the one sacrificial scalp.WPP/Grey GlobalOne small step for WPP, one giant leap for Sir Martin Sorrell. The acquisition of Grey Global is only the latest in a long line of takeovers for the hyper acquisitive advertising goliath, WPP, but there is a significance in this latest deal that goes beyond the fact that Grey was the last independent of any significance outside the sway of the big networks. In theory, it prevents the total wipeout of creditors that might occur in a complete liquidation.Yet with airlines, the effect is only to perpetuate and make worse an already unsustainable excess of capacity over demand.