If you took charge of a sizable biopharma company in 2017, there was one thing you had to do. Michel Vounatsos and Dave Ricks did it at Biogen and Eli Lilly, respectively. Emma Walmsley did it in a big way at GlaxoSmithKline. Ludwig Hantson followed the trend at Alexion. And Kåre Schultz is in the middle of topping them all at Teva.
All these recently hired CEOs arrived in front of their new charges carrying a pipeline with multiple programs crossed out, pink slips or both. That put upward of 40 drug development programs up for grabs and left thousands of people polishing up their résumés.
In theory, the actions will create more focused R&D operations and pipelines that deliver more bang per buck. But that is an unrealized vision for many leaders who, despite their efforts to prune and invest wisely, remain perpetually in a cycle of expansion followed by bloodletting.
To take one example, stories about Biogen cutting in some areas to invest more in others—the broad outline of Vounatsos’ strategy—date back more than a decade. Change some of the names, swap in 2017’s headwinds and trends and, voila, the decade-old story is up to date.
Will this year’s crop of cuts reset the paths of Alexion, Biogen, GSK, Lilly and Teva? Or simply restart a cycle that will be completed around the time of FierceBiotech’s “Looking ahead to 2023” series of articles?
History suggests at least some of the CEOs will fail to lead their companies into brighter futures. It also suggests that some biotechs will profit from their readiness with the ax.
Odds are, the newly minted CEOs of 2017 have chucked out some wheat with the chaff. And, now more than ever, there are plenty of biotechs that want to sift through the discard pile in search of assets undervalued by their former owners.
Vivek Ramaswamy’s Roivant Sciences, fresh from receiving a $1.1 billion investment from SoftBank, is at the front of the queue. Farther back, companies set up with the express purpose of picking up and advancing the overflows from Big Pharma pipelines—such as Mereo BioPharma—are jostling for position with the new wave of artificial intelligence-enabled drug repurposing shops and all the more traditional biotechs.
Each is looking to replicate the success of firms such as Clovis Oncology, which acquired a PARP inhibitor from Pfizer for nothing but equity upfront and used it to build a business worth north of $3 billion.
Having been left on the cutting room floor, some of the assets discarded by the 2017 class of CEOs, plus those shed in dribs and drabs by their more established peers, will likely go cheaply, too. And at some point one or more of the CEOs may look back on the one they let get away.