Newly named Biogen CEO faces tough challenges
Biogen Inc.’s newly named chief executive, Michel Vounatsos, next month will take the helm of Massachusetts’ biggest biotech as it grapples with slower growth and other challenges.
Vounatsos inherits a company that’s the world leader in multiple sclerosis drugs, but faces eroding revenue and limited near-term prospects for the launch of new blockbuster medicines. While the Food and Drug Administration is reviewing the Cambridge company’s application for approval of an experimental drug to treat spinal muscular atrophy, a rare neurological disorder, its development program for Alzheimer’s disease — considered crucial to Biogen’s future — remains years away from yielding results that could lead to a product on the market.
Vounatsos, 55, is a French national and native of Casablanca, Morocco. He only joined Biogen last April, when he came on board as its chief commercial officer, but he brought with him 20 years of experience at drug giant Merck & Co. He’ll succeed George A. Scangos, who has led the company since 2010 but said in July that he would step down when the company named a replacement.
The new chief executive, who also will sit on Biogen’s board, said in an interview that’s he’s encouraged by the company’s roster of experimental drugs, but plans to work to strengthen it by acquiring other experimental medicines.
“While the pipeline is good, it’s not as good as it could be,” Vounatsos said. “We want to accelerate our process of complementing the current portfolio by acquiring additional candidates in the early and late stages. . . . We have to pave the way for the long-term sustainability of Biogen. This is why I came.”
Vounatsos, who until now has kept a low profile in the Boston-area life sciences industry, held leadership positions at Merck in Europe, China, and the United States. Since taking over Biogen’s commercial operations eight months ago, he has worked, among other things, to expand the company’s multiple sclerosis franchise in global markets.
“The guy’s got a tough job ahead of him,” said Michael Gilman, a veteran Boston-area biotech executive who said he hasn’t yet met Vounatsos. “The company’s commercial businesses are sort of leveling off, and the company’s R&D is a big bet on Alzheimer’s.”
Industry analysts have suggested Biogen is at pivotal stage where it will have to either buy smaller biotechs to gain critical mass or be acquired by a larger drug maker. Vounatsos, however, insisted there are no plans to sell the company.
“This is not on my agenda,” he said.
Biogen unveiled its change at the top shortly after financial markets closed Monday. The company’s shares were unchanged in after-market trading.
Analysts said the appointment of Vounatsos appeared to make a takeover of Biogen more remote, though the company would still have to consider any attractive offer.
“Biogen’s stock is likely to sell off modestly over the next few days on this announcement, given the perception that acquisition of the company is less likely,” Geoffrey Porges, biotech analyst for Boston health care investment bank Leerink Partners wrote in a note to investors.
Vounatsos, who said he was honored to build on the legacy of Scangos, said his immediate goals included winning FDA approval for Spinraza, which would be the first approved medicine for spinal muscular atrophy; extending the company’s international business; and, enrolling patients for a pivotal late-stage clinical trial of its promising Alzheimer’s drug candidate, called aducanumab.
“The lead candidate we have for Alzheimer’s is certainly attracting a lot of attention,” he said. “This is where the market is moving. In some of the developed [countries], we’ll have 25 to 30 percent of the population over age 60 by 2030. That’s why this is an important drug to have in our portfolio.”
Vounatsos, who has a background in both medicine and business, received a medical certificate from the Universite Victor Segalen, Bordeaux II, in France, and a master’s in business administration from the HEC School of Management in Paris.
Scangos, 68, is credited with leading a turnaround in his six years at the helm. In a July interview, he said, “The board thinks it’s a good time for a transition. I agree.”
Among other moves, Scangos restructured Biogen, divested its Idec cancer-drug division, refocused the company’s research on neurology and hematology, and moved its headquarters back to Kendall Square from Weston. He also presided over the rollout of a half-dozen new drugs, including the multiple sclerosis pill Tecfidera, one of three MS medicines in its portfolio that each generate more than $1 billion a year in sales.
He’s also had to make some more difficult moves. Last year, Scangos detailed a plan to cut about 880 jobs, including 400 in Massachusetts, in recognition of Biogen’s slowing sales growth. And, in May, he disclosed plans to spin off its hemophilia drug franchise, which sells two drugs to treat the bleeding disorder, as a separate publicly traded company.