Alexion replaces CEO, CFO amid Soliris sales fraud investigation

Exit
Alexion's CEO and CFO are departing amid a sales fraud investigation of the company's lead med, Soliris.

Alexion still hasn’t wrapped up its internal investigation of a former employee’s sales fraud allegations. But in the meantime, its CEO and CFO are hitting the road.

Former AstraZeneca chief David Brennan will step in as interim skipper for David Hallal, who has resigned for personal reasons, Alexion said Monday. And David Anderson, who held Honeywell’s CFO post for 11 years, will step into that same role at the biotech, succeeding Vikas Sinha, who Alexion says has left to pursue other opportunities.

As one source told CNBC, the pair lost the confidence of the Connecticut drugmaker’s board of directors, though it’s unclear what caused the shift.

Alexion ran into a snag last month, when it said it was probing claims from a former staffer that it used fraudulent sales practices to hawk leading med Soliris. Its Audit and Finance Committee stepped up to lead the investigation in conjunction with some outside advisers, and Alexion also held off on making its Q3 regulatory filing with the Securities and Exchange Commission, triggering questions about the possibility of an earnings restatement.

Now, though, that investigation is “nearing completion,” Alexion said, and, so far, the committee still hasn’t uncovered any facts that could mandate an update to its older financial results. It expects to have its Q3 filing to the SEC in January of next year, if not before.

Despite all the hullabaloo, though, Alexion’s in prime positioning heading into the new year, Chairman and former CEO Leonard Bell insists. “This leadership transition comes during a period of great strength and momentum. The fundamentals of Alexion are very strong,” he said in a statement.

Analysts don’t necessarily disagree with the fundamentals piece. Soliris grew 10% year-over-year in Q3, and in next year’s Q1, the company plans to file for a new indication—in generalized myasthenia gravis—in both the U.S. and Europe. Barclays analyst Geoff Meacham estimates a label expansion could kick in about $200 million in unadjusted incremental sales by 2020, and that’s a conservative estimate, he wrote last week to clients after a meeting with Hallal.

“We generally came away from our meeting positive on ... but do acknowledge that significant questions remain regarding the investigation and ultimate resolution,” he said.