Elan CEO puts retirement party on hold as Alzheimer's PhIII looms

Kelly Martin is hanging on to his executive suite at Elan ($ELN) for a few more months. Instead of bowing out May 1 under a longstanding exit plan, Martin has agreed to keep the title and the responsibility for the ultimate outcome of the big Phase III program for the Alzheimer's drug bapineuzumab. That data package arrives mid-year, and the changeup in the transition schedule illustrates just how big the stakes are for all involved.

Johnson & Johnson ($JNJ) and Pfizer ($PFE) took over the driver's seat on bapineuzumab some time ago, but the recently restructured neuroscience biotech retains a hefty 25% stake in the venture. A win in Phase III would set the stage for a new CEO to come in with some mega-blockbuster income to look forward to. A failure, widely considered far more likely in the uncertain world of Alzheimer's and neuroscience in general, would make the job a turnaround deal, forcing some tough decisions.

"The implications of the upcoming completion of the bapineuzumab Phase III pivotal trials, which operationally are run by Janssen Alzheimer Immunotherapy and Pfizer, is potentially of transformational significance for Elan," the company said in a statement today. And while the board has been chatting with a "number of exceptionally high caliber candidates," the selection process is now on hold.

Jefferies' Corey Davis once told Bloomberg that bapineuzumab is Elan's lottery ticket. A winning ticket would make the CEO's job a prize catch in the industry. But the phrase "potentially of transformational significance" is a two-edged sword in biotech. That's also likely to be a consideration at Eli Lilly, which is nearing its own day of reckoning with crucial Phase III data on its Alzheimer's candidate.

- here's the press release

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