Troubled Big Biotech Biogen is losing its head of research and development Michael Ehlers, M.D., Ph.D., as its chief medical officer takes over the role.
Alfred Sandrock Jr., M.D., Ph.D., will continue on as CMO while adding Ehlers’ executive vice president of R&D responsibilities. He leaves Oct. 11.
Usually people in these positions “retire,” though invariably end up at a biotech or VC down the line. No such cliché here, as Ehlers has “decided to step down … to pursue a new career opportunity.”
In a departing quote he did say this new role was “in venture capital and biotech.” Just as news broke he was leaving Biogen, he was named CSO at life science fund Apple Tree Partners, and CEO of its gene therapy funded biotech Limelight Bio.
Michel Vounatsos, CEO at Biogen, said: “I want to thank Mike for his significant contributions and for the substantial progress made in our pipeline during his three years at Biogen. He has transformed the R&D organization and I believe he has built the best neuroscience team in the industry.”
That team, however, has been beset by failure: Back in March, Biogen and partner Eisai threw in the towel on late-stage tests for their once key (and much hyped) Alzheimer’s disease drug aducanumab when independent experts revealed that it just won't make the grade.
Statistically speaking, this was bound to happen: Despite the hype and the hope coming from Biogen, 99% of all trials in Alzheimer’s have failed over the past 15 years, and drugs on the market for the memory-wasting disease are limited in their capacity to curb its effects.
Getting an effective, safe Alzheimer’s drug on the market is the Holy Grail in pharma research, but the disease continues to be an R&D black hole.
Then, a few months later, one of the last major late-stage attempts at stopping Alzheimer’s using a BACE inhibitor ended up on the trash pile with so many others when the pair scrapped work on elenbecestat.
And just last month, it ditched a midstage effort targeting the lung-scarring disease idiopathic pulmonary fibrosis due to “safety concerns.”
It’s also been dealing with sharp competition for its multiple sclerosis drug Tecfidera and has been making pointed attempts to beat back rivals.
It has fared better in other areas, namely the $1.7 billion-a-year Spinraza to treat spinal muscular atrophy (SMA), which was given a small boost after the competition in Novartis’ gene therapy Zolgensma was hit by allegations of data manipulation by its biotech buyout AveXis.
Back in July, Biogen also presented a new Spinraza data set to back up its oft-cited contention that the drug should be the “foundation” of care for SMA. In an ongoing study, 25 patients who are being tracked for up to four years are still alive, and they don’t require breathing assistance from a ventilator, the company said.
It also spent nearly $900 million on gene therapy biotech Nightstar earlier this year. Overall, however, its R&D will be remembered for its failure create a new Alzheimer’s drug.
Ehlers said: “I am very proud of the accomplishments we have achieved in the past three years. With nine read-outs expected by the end of 2020, I believe Biogen is in a unique position to bring breakthroughs in neuroscience and I am confident in the team in place to realize the full potential of a significantly expanded pipeline. I believe it is the right time to pass the baton, and I am excited about taking on a new challenge in venture capital and biotech with the same broad goal of converting differentiated science into meaningful medicines for patients.”
In a note to clients, analysts at Jefferies said: “In the short-term, the loss of Michael Ehlers probably means: (1) the company is unlikely to be acquired very soon, which is one part of the bull argument; (2) signals ongoing frustration and uncertainty about which direction the company is going; (3) may or may not signal that BIIB is more likely to do a deal because one could argue that Ehlers had differing opinions about what to buy vs the Board.
“To the third point, we can't identify any specific transaction that would materially change investor views other than SAGE and SRPT - both of which had significant pullbacks recently. However, SAGE does not have Phase III data until YE:19/early 2020, which would need to be seen first.
“Bottom line, we maintain our HOLD rating based on lack of visibility on Tecfidera binary decision, uncertainty around pipeline development, and the time it will take to build out the portfolio with more BD and M&A over a couple of years.”
Analyst at JPM were more downbeat, saying: “With frustration around the pipeline and the perceived lack of near-term value drivers mounting, this morning’s announcement that Biogen’s head of R&D, Mike Ehlers, is leaving (by choice) does little to instill confidence in the company’s R&D outlook/direction.
“Though his departure could be an opportunity to mix up the R&D strategy and ease some of the Street’s concerns around where long-term growth will come from, mgmt remains steadfast in the current approach to R&D. Al Sandrock, the current CMO, will also take over R&D and is well liked. Nevertheless, failure by BIIB to acknowledge the Street's desire for a change (whether in R&D or elsewhere), coupled with the optics of the co’s highest-ranking R&D official leaving by choice, could further weigh on sentiment today.”