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Biotech execs play musical chairs in hot market

From left to right: Michael Gilman, Tony Coles, and Jose-Carlos Gutierrez-Ramos.

CAMBRIDGE — Jose-Carlos Gutierrez-Ramos spent five years leading biotherapeutics research at the drug maker Pfizer Inc. When he wasn’t overseeing dozens of research and development programs, he was often batting away inquiries — more than 50 a year — from professional headhunters trying to lure him to another job.

“In the last 12 months [at Pfizer], I got more than 100 calls,” he recalled. “They call if they hear there’s a change in your work environment. Or they just call out of the blue. If they hear that you’re in the market, it’s not unusual to have six or seven offers.”


Gutierrez-Ramos ultimately took a call, and it led to his hiring last year as chief executive of Synlogic Inc., a Cambridge startup backed in part by the Bill & Melinda Gates Foundation.

The game of musical chairs is familiar to anyone working in life sciences over the past decade, as businesses expand, fold, or are acquired. But the pace has become more frenzied in the past few years, especially in the Boston area’s sizzling biotech sector. Demand for talent is fueled by scientific breakthroughs, venture capitalists bankrolling startups, and Big Pharma setting up shop in and around Kendall Square.

In this climate, ever-richer compensation packages are required to land chief executives and other “C-suite” executives such as chief scientific officers and chief financial officers.

“This is the health care capital of the world,” said Tom Carey, founder of Perspective Group, a Boston executive-search firm specializing in recruiting senior industry executives. “You can assume the executives you’re talking to are investigating multiple offers. So there’s a pressure to move the process more quickly because of the competitive marketplace.”

Evidence of that competitive marketplace isn’t hard to find.

Michael Ehlers, who succeeded Gutierrez-Ramos as site head at Pfizer’s local research center, hosted a Pfizer gathering of local biotech executives in April. Two weeks later, Biogen Inc., on the other side of Kendall Square, announced it had hired Ehlers as its research and development chief. He fills a job that had been open for months, since Biogen’s former research chief Doug Williams decamped to lead Woburn’s Codiak Biosciences Inc.


Waltham’s ImmunoGen Inc., seeking a successor to retiring chief executive Daniel Junius, recently raided drug giant Shire PLC of Lexington to hire Mark J. Enyedy, who had been Shire’s head of corporate development. Ariad Pharmaceuticals Inc., the Cambridge company that sacked founder and longtime chief executive Harvey J. Berger last year, tapped as his replacement Paris Panayiotopoulos, who spent the past two years as president of German-owned drug maker EMD Serono in Rockland.

And the list goes on.

“There’s a war for talent,” said Marty Caney, managing partner at EnDevor Scientific, a Malden search firm focused on middle-management scientists. “This is the most active I’ve ever seen it. We’re seeing a dramatic uptick in hiring on all levels and all scientific fronts.”

Pay has been rising more rapidly for biotech executives in the Boston area than anywhere else in the country, including the San Francisco Bay Area, said J. Casey Lindstrom, senior consulting partners at Haigh & Co., a compensation consulting firm in Cambridge. Lindstrom calls it an “arms race,” saying, “There’s almost a paranoia that if we don’t pay [in the] 75th percentile, someone else will.”

According to Haigh data from 44 of the largest biopharma companies in New England — 40 of them in the Boston area — the average total compensation in 2015 was $5.4 million for CEOs, $2.4 million for chief medical officers, and $2 million for chief financial officers. CEO pay has been growing at a rate of 9.6 percent annually, roughly doubling in seven years. And for those chief executives who make a move, the increases can be much larger.


Executives in some niches — chief medical officers at cancer drug companies, or chemistry and manufacturing scientists at companies transitioning from drug discovery to clinical trials — can command raises of 30 to 40 percent in a move, other compensation specialists say.

Pay packages typically include salary and bonuses, but are heavy on stock options and restricted stock awards. Options, often deployed as incentives at preclinical companies, give executives the right to buy stock in the future at a fixed price. They can be lucrative if the share value rises above the fixed price, or worthless if it falls below it. Restricted stock, favored by more mature companies, is given at a future date based on time served or performance. Its value is determined by the price on the day the stock vests.

Many executives say they’re motivated less by the money than the opportunity to work on exciting science, shepherd new therapies to market, and help patients.

“We don’t make widgets in this industry,” said Enyedy, the newly installed chief executive at ImmunoGen, which developed technology enabling drugs to bind to tumors and release cancer-killing toxins. “We can make a difference in patients’ lives, and that’s what engages me.”


Ehlers, a neuroscientist, said he was drawn to Biogen by what he called its industry-leading neurology drug pipeline, which includes not only multiple sclerosis medicines but also experimental treatments for Alzheimer’s disease and other neurodegenerative disorders.

“There’s a real need for people who can straddle real science and business,” Ehlers said. “It’s a rarefied skill set: the science-oriented enterpreneurial biotech person. There used to be set tracks. You’d get a job at a pharma company and spend 25 years working your way up the ladder. Now there are lots of experiences you can have and many different ways you can go.”

While top executives move to bigger and smaller companies, the dominant trend in recent years has been defection from Big Pharma to the world of startups, where both the risks and the rewards can be greater. “In small teams, the accountability is higher than in large pharma companies,” said Panayiotopoulos, one of those who made such a move.

“You go from 50,000 employees to five or 10,” said Tony Coles, chief executive of Cambridge startup Yumanity Therapeutics, who has worked in large and small drug companies. “You’re starting from scratch and building a company up and trying to make a difference at some elemental level. The environment is entirely different, but you can apply the wisdom and experience you learned at the large companies. It stays with you forever.”


Williams chose to leave Biogen so he could be “closer to the science” at a startup like Codiak, which is exploring the role exomes — protein-encoding parts of genes — can play in treating diseases. Now that he is trying to assemble his own team, he is experiencing “the fierce competition” that helped him land a new job from a different perspective.

“We’ve lost a few people we’ve tried to get just because it is so competitive,” he conceded. “Salaries are going up. And you can’t wait too long because people have multiple offers. All of this does create disruption and uncertainty and holes at companies. That’s the downside.”

One quality much in demand is an executive’s network of contacts. This is especially important for the scores of venture-backed biotech and medical technology startups that want to forge partnerships with larger players to share the costs and risks of developing products. Such alliances can lead to acquisitions that enable early investors to cash out — and send executives into the arms of headhunters eager to place them in new jobs.

“There’s just an insatiable appetite for management talent to run these companies,” said serial entrepreneur Michael Gilman, who recently sold his second biotech startup and may soon be back in the job market himself. “They’re looking for somebody who has lots of drug discovery, drug development experience. They’re looking for somebody who has management experience. And they’re looking for someone who has a network in Big Pharma.”

Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.