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Msg  718 of 735  at  5/25/2022 8:29:49 PM  by


Biogen Needs a New CEO. Here Are Some Options.


Biogen Needs a New CEO. Here Are Some Options.


Biogen set off a high-stakes guessing game early this month when it announced that its CEO Michel Vounatsos would leave, after the company effectively threw in the towel on efforts to market its controversial Alzheimer's disease therapy Aduhelm: Who will be the company's next CEO?

The executive who replaces Vounatsos will inherit a large-cap biotech facing significant challenges: Eroding sales of key drugs, a disappointing denouement of its Aduhelm program, and a stock price down 34.5% over the past two years, a period in which the S&P 500 is up 38.6%.

Still, Biogen (ticker: BIIB) remains one of the small group of large-cap biotechs, a high-profile perch for an executive willing to take on a challenge. That could mean a skillful mergers and acquisitions strategy, or an effort to sell the company to a bigger competitor.

In a note out early Tuesday, RBC Capital Markets analyst Brian Abrahams offered a list of his top picks for Biogen's next CEO, including two CEOs of big biotechs recently snapped up by Pfizer (PFE), the former CEO of Alexion, and a prominent biopharma executive who once ran Allergan, among others.

"BIIB would likely be best served by a CEO capable of either major strategic [business development] to revitalize the pipeline, or one who can restructure the company's portfolio potentially to make it attractive to an acquirer, and look to new leadership to help re-energize the story and investor base into year-end," Abrahams wrote.

Abrahams suggested a number of potential CEOs who sold large biopharma companies, including Vlad Coric, currently CEO of Biohaven Pharmaceutical (BHVN), which Pfizer agreed to buy earlier this month for $11.6 billion. It seems unlikely, however, that Coric will be available: Pfizer's acquisition of Biohaven won't close until next year, and Coric is currently slated to lead a successor company that will continue to develop the drugs in Biohaven's pipeline, aside from the seven calcitonin gene-related peptide drugs that Pfizer wants.

Another name on Abrahams' list is Amit Munshi, who led Arena Pharmaceuticals, which Pfizer acquired this year for $6.7 billion. Arena developed a drug called etrasimod that is now expected to be a blockbuster for Pfizer; on Tuesday, Pfizer unveiled new promising data on two Phase 3 trials of the drug.

"We believe he likely has the experience and proven execution to take a critical look at BIIB," Abrahams wrote.

Abrahams also suggested Ludwig Hantson, CEO of Alexion when it was acquired by AstraZeneca (AZN) for $39 billion, and Brent Saunders, CEO of Allergan when it was acquired by AbbVie (ABBV) for $63 billion.

Abrahams listed a number of current pharmaceutical executives, including Anne White, who leads neuroscience at Eli Lilly (LLY) and is responsible for its Alzheimer's therapy donanemab, which works similarly to Biogen's Aduhelm.

Another option cited by Abrahams is Jeffrey Leiden, former longtime CEO of Vertex (VRTX) and currently its executive chairman. Abrahams wrote that Leiden "could be tapped by BIIB's more conservative leaning board, given his proven track record of turning companies around," but noted that he is "not sure" Leiden would want the job.

Other names on Abrahams' list include a former Biogen CFO named Paul Clancy and Biogen's current president, Alisha Alaimo. "We would not necessarily expect someone within the organization to be elevated to the top seat and believe investors may find an internal hire less exciting," Abrahams wrote.

Investors may have a while to wait. Biogen is waiting on data from a Phase 3 trial of another Alzheimer's drug, lecanemab, expected this fall, which will likely be a catalyst for the stock. Abrahams said he doesn't necessarily think the company will make a pick before those data are announced.


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