Biogen Idec Inc., the world’s largest maker of multiple sclerosis treatments, will name George A. Scangos chief executive officer as early as today, according to a person familiar with the hiring process.
Scangos will leave Exelixis Inc., where he has been chief executive since 1996, to replace former Biogen CEO James Mullen, who retired June 8, said the person, who asked not to be named because the deliberations are private.
Biogen’s new CEO starts as the Cambridge, Massachusetts- based drugmaker struggles to expand the use of its fastest- growing drug, Tysabri, and has engaged in repeated proxy fights with billionaire investor Carl Icahn. Under Scangos, Exelixis, with no marketed products, made medicine-development deals with companies led by Pfizer Inc., the world’s largest drugmaker.
“He’s a very good dealmaker, but I wouldn’t say Exelixis has done the best job at translating science into novel molecules that come to the marketplace,” Michael King, an analyst for Wedbush Morgan Securities in New York, said today in a telephone interview. “It remains to be seen what he’ll do at a company the size of Biogen.”
Biogen fell $1.25, or 2.6 percent, to $47.45 at 4:01 p.m. New York time in Nasdaq Stock Market composite trading. Exelixis declined 14 cents, or 3.9 percent, to $3.47.
Biogen confirmed the appointment in a statement today, saying Scangos would start July 15. Scangos, 62, will also be named to the board of directors, Biogen said.
Exelixis promoted Michael Morrissey, 49, president of research and development, to chief executive officer, effective July 15. Scangos will remain on the board, and Morrissey will become a director, Exelixis said in a statement today.
Scangos steered South San Francisco, California-based Exelixis through its initial public offering in 2000. He has a bachelor’s degree in biology from Cornell University and a Ph.D. in microbiology from the University of Massachusetts, according to his profile on Exelixis’s website. He is chairman of San Diego-based biotechnology firm Anadys Pharmaceuticals Inc., the maker of hepatitis C treatments.
At Exelixis, he licensed rights to nine compounds to drugmakers including London-based GlaxoSmithKline Plc, Roche Holding AG, based in Basel, Switzerland, and Bristol-Myers Squibb Co. and Pfizer, both in New York. Exelixis is also jointly developing four drugs with Paris-based Sanofi-Aventis SA and Bristol-Myers.
Licensing arrangements helped Exelixis generate $151.8 million in revenue last year. Exelixis has 14 experimental drugs in human clinical testing, all but four for the treatment of cancer, Butler said in a March 8 interview.
Sanofi Cancer Deal
Sanofi bought the rights to potential cancer drug candidates from Exelixis in a May 2009 deal that may result in the French drugmaker paying more than $1 billion to its U.S. partner, the companies said at the time.
Exelixis signed a deal with Bristol-Myers in 2008, and received $240 million as a result. On June 21, Bristol-Myers and Exelixis ended the partnership on XL 184 for cancer.
“George has extensive experience managing a research organization that we think we be valuable to steering Biogen’s research efforts,” said Geoffrey Meacham, an analyst with JPMorgan Securities Inc. in New York, in a note to clients today. “That said, a lack of commercial experience could create challenges in managing the increasing competition in MS and bringing additional products to market.”
Biogen has six new medicines in the third and final stage of testing generally required for U.S. approval, according to the company’s website. Three, for MS, include a long-acting version of the company’s best-seller, Avonex; a pill called BG- 12; and a treatment called daclizumab in development with Abbott Laboratories. Drugs for leukemia, hemophilia and heart failure also are in final testing.
Mullen became CEO at Biogen in 2000, when Avonex was the company’s lone drug on the market. Mullen oversaw the temporary recall of Tysabri, also for MS, after it was linked to fatal brain infections. Scangos takes over as Biogen has fallen short of its goal for 100,000 new patients to take Tysabri, with about 50,300 in treatment as of March 31.
Biogen faces new competition from Novartis AG’s Gilenia multiple sclerosis pill, which won the backing of a U.S. Food and Drug Administration advisory panel on June 10. The drug will threaten Tysabri’s growth, said Bret Holley, a New York-based analyst for Oppenheimer & Co., in a June 11 note to investors.
Icahn has pressured Biogen’s management since 2007 when the company abandoned a plan to sell itself. He gained two board members in a 2009 proxy fight and another two board members this year to avert the company’s third proxy challenge from the investor in as many years.
On March 8, Exelixis fired 270 people, or 40 percent of its staff, to focus its efforts on drugs that are closest to regulatory approval, which the company said would save it $90 million through 2011.