Departing Pharma CEOs Leave Waning Sales for Successors to Solveby
Novo Nordisk is latest company to appoint a new CEO this year
Gilead, Lilly, Biogen, Valeant also saw leaders depart
Another pharmaceutical chief executive is riding off into the sunset, the latest departure in an industry struggling to invent new medicines amid unprecedented pricing pressure.
Novo Nordisk A/S’s Lars Rebien Soerensen, chosen by Harvard Business Review as the world’s best-performing CEO last year, is retiring from the world’s biggest maker of insulin, the company said Thursday. He joins Gilead Sciences Inc.’s John Martin and Eli Lilly & Co.’s John Lechleiter in yielding the reins to a company veteran. GlaxoSmithKline Plc’s Andrew Witty is also stepping down, and a successor will probably be named soon.
It’s been a year of change in the leadership of the world’s biggest drugmakers, which are struggling with stalling sales, patent expirations, increased pricing pressure and greater competition. Investor unrest has brought transition to the top at Valeant Pharmaceuticals International Inc., Biogen Inc. and Germany’s Stada Arzneimittal AG.
In most cases, CEOs are passing the baton after a very successful run, said Michael Kunst, a Munich-based partner with the consulting firm Bain & Co. Their successors will have to navigate increasingly thorny discussions about price and regulation, which is why many companies choose executives from within who already know the business, Kunst said.
“There’s a lot mounting up in terms of challenges in an industry that’s seen smoother sailing,” Kunst said by phone. “These companies are getting into rougher waters, but none are a complete turnaround case that needs new and fresh thinking from outside. The first port of call is definitely internal.”
At least one such change was followed by a seismic shift in strategy: One month into his new job, Bayer AG’s Werner Baumann made a $55 billion bid for Monsanto Co. to become the world’s largest producer of seeds and pesticides, shocking investors in the German inventor of aspirin. There may be more to come: Gilead CEO John Milligan, who took over from Martin in March, said in May that “it’s time for us to go out and do important deals.”