Duggan Now Billionaire as Pharmacyclics Up on Cancer DrugBrendan Coffey
Robert W. Duggan, the chief executive officer of Pharmacyclics Inc., which makes an experimental treatment for chronic lymphocytic leukemia, has become a billionaire after the company’s shares have tripled in a year.
Pharmacyclics’ medicine, called ibrutinib, inhibits an enzyme that promotes cancer growth. It helped control the malignancy in 68 percent of 116 patients who hadn’t been previously treated for the blood cancer, the Sunnyvale, California-based company said in a December statement.
“It’s not just promising, it has those unique profiles of looking very efficacious but also really safe,” said John McCamant, editor of Medical Technology Stock Letter, in a phone interview. “That is very rare in cancer drugs.”
The stock surge comes after Duggan, 68, made hundreds of millions of dollars investing in and selling companies such as a bakery chain, a European billboard operation and robotic surgery innovator. He has a net worth of at least $1.2 billion, according to the Bloomberg Billionaires Index, and has never appeared on an international wealth ranking.
Naomi Cretcher, a spokeswoman for Pharmacyclics, did not respond to e-mail and phone queries for comment, after entertaining an interview request with Bloomberg News in December.
Johnson & Johnson
Ibrutinib, which is delivered by pill and is in Phase III drug trials -- the last hurdle before market introduction -- is part of a new class of medicines for chronic lymphocytic leukemia, or CLL, a cancer that strikes about 16,000 Americans a year at a median age of about 72.
The goal is to use the drug without chemotherapy, a standard treatment that can be too toxic for some elderly patients. Ibrutinib may generate as much as $5 billion a year if approved for CLL and other blood cancers, said Michael Yee, an RBC Capital Markets analyst in December.
In December 2011, New Brunswick, New Jersey-based Johnson & Johnson said it would pay Pharmacyclics, which Duggan took control of in a 2008 boardroom coup, as much as $975 million to fund getting the drug to market in exchange for half the profits generated globally.
There are 27 human trials of ibutrinib completed, under way or planned. McCamant said he believes the company will begin selling the drug in 2014, about one year faster than Wall Street consensus, according to data compiled by Bloomberg Industries. He said it also has a good chance of developing additional usages for the drug, such as treating autoimmune disorders.
Pharmacyclics generated $103 million in revenue in the quarter that ended September 30, 2012, up 178 percent from the prior year. Of the 13 analysts that cover the company, 61.5 percent have a buy rating on the stock, with an average target price of $80.38 per share. The stock was down 1.23 percent to $70.62 at 12:03 a.m. in trading in New York.
Duggan owns almost 20 percent of Pharmacyclics shares, and controls another 500,000 shares he manages on behalf of undisclosed high net worth individuals, according to filings with the U.S. Securities and Exchange Commission.
The billionaire bought most of his shares between 2004 and 2011, at a cost of $42 million, including shares he received as repayment of $6 million he loaned the company, according to data compiled by Bloomberg. They are valued at about $990 million.
He also has at least $250 million in cash and other investable assets, based upon an analysis of past investments and stock sales, taxes, charitable giving and stock purchases, according to the Bloomberg ranking.