CEO, Biogen Idec
2012 pay: $13.45 million
2011 pay: $11.33 million
Professional Profile: George Scangos, 65, has led an image turnaround at Biogen Idec ($BIIB). He became CEO in July 2010 after years of investor unrest over lagging stock performance and scattered research and development. He set the tone for a more focused approach to R&D with his decision to cut research in oncology and cardiology in 2010, narrowing the scope of programs to core areas such as neurology, including Biogen's bread-and-butter market for drugs against multiple sclerosis (MS). Investors have applauded his performance, the company's pipeline and the deft moves to elevate marquee products such as Tysabri and Avonex.
2012 Compensation Stack: Biogen paid Scangos $7,955,654 in stock awards last year, meaning more than half of his $13.45 million in total compensation came from equity. The emphasis on stock pay reflects how Biogen, like many other companies, wants compensation for its executives to be in sync with the interests of shareholders. His salary was $1,294,231, or less than 10% of his pay package. Biogen paid him $3,785,600 in nonequity incentive plan pay, a fancy phrase that means bonus, and $416,317 in other compensation.
Company Performance: Nobody should be surprised to see a hefty hike in pay for George Scangos in 2012. Last month Biogen began to realize the blockbuster sales potential of Tecfidera, which the FDA approved on March 27 as a new oral MS therapy. Yet last year was a crucial period for the company to advance the product, previously called BG-12, to primetime. Last year Biogen delivered applications for approval of the MS pill in the U.S. and European Union and laid the foundation for the sales launch of the product in the key Western markets.
Last year the R&D organization, led by chief scientist Doug Williams, delivered upbeat Phase III readouts for the company's long-acting candidates for hemophilia types A and B. The regulatory group quickly shipped applications for approvals of the two clotting-factor drugs, with potential FDA decisions later this year. Recall that Scangos kept the hemophilia franchise during the major R&D reorganizations in 2010 and 2011. Even though Biogen had never sold or won approval for a hemophilia drug, the data on the Factor VIII and IX products were good enough to justify keeping them.
Biogen wrapped up late-stage work on a peg interferon product in the same class of drugs as its blockbuster seller Avonex, reporting the positive results this January and setting the stage for regulatory submissions in 2013. It's one of a growing menu of options that Biogen aims to offer patients with MS, a disease that attacks the nervous system and leads to progressive nerve damage and neurological problems.
Scangos, a biologist by training, has held his own on the commercial front. While Biogen missed analyst projections for the fourth quarter of 2012, last year the company managed to score a favorable label update for the MS therapeutic Tysabri and the FDA approved an injector pen for Avonex, giving patients a convenient way of taking the drug.
Scangos's crew lost its bet on dexpramipexole, which failed to beat placebo in a Phase III study in patients with amyotrophic lateral sclerosis, another difficult neurological disorder. The company broke the bad news at the start of this year, prompting a dip in its stock price.
Yet this year the shares have already jumped 49.52% to $218.85 as of May 3. Biogen and Scangos took the dexpramipexole setback in stride and have kept running.
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