GSK Chief Executive Sir Andrew Witty has ruled out a takeover bid for AstraZeneca.

Sir Andrew told shareholders at the company’s annual general meeting yesterday not to expect any major takeovers in the future as GSK focuses on the potential of its pipeline.

In response to a question over a possible merger, Sir Andrew said a deal for AZ would be “very distracting” at a time when experimental drugs in its pipeline are entering an exciting period.

The future of AstraZeneca remains uncertain as the company battles against generic competition, setbacks in drug development and the loss of its CEO David Brennan after he retires on June 1.

Revenue was down by 8% in the first three months of this year at AZ with sales in the US, Western Europe, Established Rest of the World and Emerging Rest of the World all falling.

David Brennan announced his retirement to coincide with the publication of the Q1 results after admitting that the pharmaceutical sector is “experiencing pressures none of which I’ve witnessed in my 36 years in the industry”.

AZ shareholders had criticised his leadership in recent years after the company had failed to compensate for the loss of revenue with mergers and acquisitions.

As a result, industry analysts have speculated that AZ may become a takeover target for one of pharma’s biggest companies.

A merger of GSK and AZ, the two largest pharma companies in the UK, would provide big cost savings. It led one GSK shareholder to raise the issue with the Chief Executive claiming it would be more effective than the recent $2.6bn offer for Human Genome Sciences.

Sir Andrew said GSK believes it can “deliver an extraordinary return to shareholders through this acquisition. I think we waited until exactly the right moment to make this offer, but nonetheless this is a compelling offer for shareholders at HGS to consider,” he said.

The $13 per share offer was rejected by HGS – who have now instructed Goldman Sachs and Credit Suisse to help explore strategic alternatives to GSK’s bid. Sir Andrew declined to comment on whether he had made contact with HGS’ management since GSK’s offer was rejected.

David Brennan is to retire from his position as Chief Executive Officer and board member of AstraZeneca after more than six years in the role.

Pressure has been growing on the 59-year-old to depart after major shareholders questioned his leadership in the face of generic competition on several leading brands.

Mr Brennan says he is proud of his achievements as CEO and that it has been a “genuine privilege” to lead the company.

He will retire on 1 June 2012 with Executive Director and Chief Financial Officer Simon Lowth acting as interim CEO until a permanent successor has been found.

The departing Mr Brennan admits the pharmaceutical sector is “experiencing pressures none of which I’ve witnessed in my 36 years in the industry”. But he says he remains “very confident” that AZ has the “capabilities, courage and determination to be successful into the future”.

“If we maintain our focus on meeting the needs of patients and trying to solve unmet patient needs, we can continue to deliver attractive and sustained returns for our shareholders,” he said.

Mr Brennan outlined that during his six years as AZ’s leader the company has developed some of the “world’s leading products” and “established a position” in emerging markets. He said AZ had “re-shaped R&D” and “returned considerable value to shareholders”.

He added during his reign that the London-based company had “tried to lead the debate on restoring trust” in the pharma industry through the introduction of a “bold policy on interactions with healthcare professionals”.

His decision to retire was revealed on the same day AZ posted its Q1 results for 2012 – which saw profits fall by 38% and revenue drop by 11% as the company faced generic competition on a number of key products.

AstraZeneca CEO David Brennan has played down speculation over his future at the company.

Major shareholders recently questioned whether Mr Brennan was the right man to lead the company out of its current pipeline problems.

However, the CEO says he is “plugged in” to the current issues the company faces and insists his role “hasn’t changed a bit” after the criticism of his leadership.

AZ is set to be one of the biggest losers during the ‘patent cliff’. Its major brands Seroquel and Atacand lose protection this year, Nexium is set to go off patent in 2014/15 and Crestor in 2016.

Its huge £15.6 billion takeover of MedImmune in 2007 was hoped to ease the pressure of generic competition but has failed to meet expectations and led one shareholder to say the deal has “tarnished” the CEO’s reputation.

But Mr Brennan, who has been the CEO for the past six years, insists he is the right man to lead the company. He commented: “I read and hear and see lots of things, but we’re here trying to change policy, make good decisions and execute our strategy.

“If it’s about restructuring, we can do that without a big deal. Maybe somebody sees something different, but spending more money does not have a linear increase in the number of returns you get from a research and development perspective.”

It’s widely expected that the 58-year-old will vacate his role around the time of his 60^th birthday. But an AZ spokesperson said that Mr Brennan is still “fully committed to leading AstraZeneca”.

Investors at AstraZeneca have called for the pharmaceutical company’s board and executive team to be changed and a new business strategy introduced.

AZ has been trading on the lowest price/earning multiple across the sector, which has led to several major investors in the company calling for Chief Executive David Brennan (pictured) to be replaced.

Speaking to the Financial Times, one investor said Mr Brennan is “under intense pressure”.

The company’s board of directors already looks set to change with Leif Johansson seeking formal election as chairman at AZ’s AGM later this month.

Some of the company’s top 20 investors have suggested replacing David Brennan with current Finance Director, Simon Lowth.

Whilst some have questioned Mr Lowth’s experience, Tony Zook, Global Commercial Vice President, has also been suggested as a replacement for Mr Brennan – who is expected to vacate his position when he turns 60 next year.

But Jack Scannell, analyst at Bernstein Research, said AZ should avoid a “lawyer or a marketing person” taking over. “You either need Attila the Hun – a total butcher – to run it down until it can be bought, or a Paul Janssen-like figure: a successful scientist who can really take on the research team,” he said.

The analyst revealed that Bernstein Research expects AstraZeneca to complete a mid-sized acquisition after a note on the matter said “the status quo is not sustainable” and that “desperate times may lead to outwardly appearing desperate actions.”

However, another shareholder told the FT that any new acquisitions were “unthinkable” at present until the company’s senior management team had been reshuffled to develop a new credible strategy for the group.