Score one for gender diversity in the male-dominated biotech industry.
Vertex Pharmaceuticals said Thursday that its chief medical officer, Reshma Kewalramani, will take over as president and chief executive in April, succeeding Jeffrey Leiden, who has run the Boston company for seven years and will continue as executive chairman.
Kewalramani, 46, will be the first female CEO at a top-tier US biotech company, a watershed moment for Vertex — it’s the state’s second-largest biotech by stock market value, after Biogen — and the industry, which has struggled to diversify its ranks.
“This is a milestone,” said Jody Rose, president of the New England Venture Capital Association, who is working with Massachusetts companies to recruit more women and people of color into high-skill tech jobs. “Not just because Reshma is a woman, but because they have selected the right person for the role.”
Kewalramani’s promotion is impressive. Her career path has taken her from physician resident at Massachusetts General Hospital to senior positions at the California biotech giant Amgen to Vertex, which she joined in 2017.
All the while she’s been raising twin boys.
But, as Rose is quick to note, “There is still a lot of work that still needs to be done in the industry.”
The Massachusetts Biotech Council released an extensive report almost two years ago that found one in four “C-suite” executives in biotech were women. In the boardroom, the number is just one in 10. There has been progress since then, but not enough.
Vertex has made diversity a priority. About 40 percent of executives at the vice president level and above are women, as are two of its nine board members, according to the company. A third female director, Elaine Ullian, just retired.
In an interview, Kewalramani was careful to balance discussion of the importance of corporate diversity with an insistence that Vertex would pursue the same strategy it has under Leiden: expanding beyond its core drugs, which treat the genetic lung ailment cystic fibrosis. The company has targeted five more diseases, including sickle cell disease and beta thalassemia, which are blood disorders, and alpha-1 antitrypsin deficiency, which can lead to COPD and liver disease.
Still, she knows her professional success can help pave the way for other women and for people of color. “We need to ensure that people see this is possible,” she said. “We need to ensure that others can see this is entirely within reach.”
Abbie Celniker, a partner at Third Rock Ventures in Boston, which invests in biotech companies, said she has seen three trends develop since the MassBio report came out in 2017: more companies adding female directors, more women raising their hands for top jobs, and a “bold mindset” among many young women eager to take on management challenges in their careers.
“It seems like there has been a boost in confidence” as companies get serious about opening up their C-suites, she said.
Leiden, who has been among the state’s highest-paid executives, deserves much of the credit for making Vertex a good corporate citizen, with a focus on diversity and STEM (science, technology, engineering, and math) education. The company has done well as it has done good, bringing three CF treatments to market, with a fourth expected to be approved next year. Since Leiden became CEO in 2012, the company’s market value has soared to more than $43 billion from $6.5 billion.
(Vertex has been criticized by some patient groups for the high cost of its CF drugs, but the same is true for most companies that develop treatments for rare diseases.)
Leiden said that as executive chairman, a post he will hold through 2023, he will support and mentor Kewalramani, and oversee two business areas: building the company’s new gene-editing research site in Boston, and political and government affairs.
“But there will be just one CEO,” he said. Leiden will continue as vice chairman of the Massachusetts Competitive Partnership, a group of high-powered CEOs formed to promote the state’s economic competitiveness.
Vertex said in a securities filing Thursday that as part of Kewalramani’s promotion, her base salary was boosted to $800,000 and will rise to $1.15 million when she becomes CEO. Her first grant of stock under her CEO pay package will be made during the first quarter of 2021, with an estimated value of $11 million.
Leiden’s base pay will drop to $1 million in his first year as executive chairman, from $1.3 million, plus a $9 million equity grant, according to the filing. He won’t get a salary in the second and third years of his term, but he is slated to receive equity awards totaling $15 million.
Leiden said the corner office transition has been in the works for about two years.
“I will be 64½” in April, he said. “Most of the people who work for me are in their 30s and 40s. One of the most important jobs of the CEO is to groom a successor and turn the job over to them.”
Leiden said he and the rest of board determined that Kewalramani met all the criteria for their perfect candidate: She is a physician and scientist, which was of the “utmost importance,” and came from inside the company; she has been instrumental in executing Vertex’s strategy; and she is a “great communicator and leader.”
I asked Kewalramani if she arrived at Vertex with the expectation that she might become CEO.
“I came to Vertex to work with Jeff and the executive team, and because of the absolutely impressive R&D pipeline I saw here,” she said. “People like Jeff and others saw it in me before I saw it in myself.”