Biogen’s ($BIIB) long-standing CEO Dr. George Scangos is to step down from the company in “the coming months” as the Big Biotech looks for a successor.
The company, which made the announcement during its Q2 results this morning, said it will begin the search for his successor “immediately.”
Biogen paid tribute to Scangos and his 6 years of service, saying in a statement that he helped lead a “remarkable transformation,” as well as increasing its revenues, earnings and stock price.
Stelios Papadopoulos, chairman of Biogen, said: “George joined Biogen at a very challenging time. He re-organized operations and he oversaw the enrichment of our product pipeline and the launch of several products. In short, George did an outstanding job and I believe he is leaving the company well positioned for success.”
“The past six years have been quite successful,” added Scangos. “We have introduced six new products onto the market, increased our earnings and revenues several fold, and transformed our R&D and commercial organizations to world-class levels, joining our already industry leading biologics manufacturing capabilities. We have brought several potentially transformative compounds into later stage clinical development and are in the process of adding to that pipeline even further.”
The board said it will consider “both internal and external candidates,” and expects to find a new leader by the end of the year. Scangos will continue to serve as CEO until his successor is found.
His departure was made as the business showed strong results on the second quarter, with total revenues jumping 12% to $2.9 billion, bolstered by its multiple sclerosis business.
But things have not all been rosy at the company, which cut 11% of its 7,550 staff last year, and also said it would stop developing a drug for lupus and end some immunology and fibrosis research.
The U.S. biotech's stock fell by about 35% over a three-month period leading up to the cuts announcement in October, due primarily to concerns around the slowing sales of its new MS pill Tecfidera--which is also coming under pressure from a major (and very early) IP challenge.
Money fell too for Scangos: After reaping a $4 million-plus cash bonus for 2014 performance, Scangos collected just $1.2 million last year as he fell short on his earnings and revenue goals for the year.
It also recently punted its hemophilia business after spinning off the unit as it looked to focus more sharply on its core portfolio.
On the Q2 call this morning, Scangos said, in response to an analyst’s question about how his leaving would hit its reshaping of the pipeline and going after other assets: “I don't think it affects it at all. The company is committed to bolstering the pipeline and we're working aggressively to do that. We would look at deals at all stages of development from preclinical through Phase III."
A Citigroup analyst asked Scangos what Biogen needs from a new CEO at the current place it finds itself in, versus when he came in.
Scangos said: “Well, look, the company is a very different company from what it was a few years ago. We have a full and excellent management team. We have a pipeline that is, I think, quite exciting--but needs to grow. So I think the company needs good management. I think the strategy of the company is solid.
“And what we need is good leadership. Somebody who can work with the people who are here. Maximize the commercial potential and the potential of our pipeline. Grow the pipeline and can work with the rest of the organization to ensure that we go forward in a way that is responsible, where we minimize expenses and where we invest aggressively in those areas that really have the potential to add value.
“Being CEO is complicated and those are the priorities I would set. Of course the search will be conducted by the board, but I don't think they would view it too differently. I think there will be a continued focus on innovation, and I'm confident we'll get someone excellent.”
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