In the second half of 2014, Amgen initiated a major overhaul aimed at cutting costs and boosting R&D activities. Now, the chief financial officer tapped on the eve of the revamp is set to bid the company adieu.
David Meline, who officially became Amgen’s CFO July 21, 2014, just days before the restructuring announcement, will retire at the end of 2019, the company said Tuesday.
“David has played an essential role in the enterprise-wide transformation that has enabled Amgen to deliver outstanding financial performance to our shareholders, while also investing heavily in new product launches, research and development, and global expansion,” CEO Robert Bradway said in a statement, crediting Meline for improving the company’s productivity.
Taking his place will be Peter Griffith, who came from private equity and advisory firm Sherwood Canyon Group. Before that, he spent about 22 years as a partner with Ernst & Young, most recently as global vice chair of corporate development, responsible for the accounting and consulting firm’s international expansion. He was also once EY’s global managing partner for finance, having helped grow the firm’s annual revenues more than 25% to over $27 billion, according to Amgen.
“His extensive global experience and financial skills will be instrumental to our strategy for investing in innovation to drive long-term growth,” Bradway said of Griffith.
Amgen dropped the restructuring bombshell late July 2014. At that time, the company said the plan was to save the company about $1.5 billion a year by 2018. To achieve that, it was targeting a workforce reduction of about 20%, or around 3,500 to 4,000 employees, and closing facilities in Washington and Colorado. It reduced the number of buildings at its headquarters in California, too, effectively cutting back its facilities footprint by 23%. The two plants in Colorado were transferred to AstraZeneca, which itself decided to shutter them earlier this year.
Meline was the one tapped to run the big project. During his tenure, Amgen has grown its operating margin to around 52% to 54% in the past three years, versus 38% and 44% in 2013 and 2014, respectively, meeting the goal the company established in its restructuring plan.
For comparison, another Big Biotech, Gilead Sciences, which just named its own new CEO, has seen its non-GAAP operating margin drop from a high of nearly 72% in 2015 to below 52% last year.
During those years, Amgen has largely refrained from large M&A deals after its 2013 buyout of Onyx Pharmaceuticals for $10 billion. It did shell out $1.55 billion for Dutch biotech Dezima Pharma in 2015 on the heels of the approval and launch of PCSK9 therapy Repatha, aiming to build a bigger cardiovascular franchise. However, it stopped development of the CETP inhibitor at the center of the deal in 2017, just as Repatha—and the entire PCSK9 class—failed to catch fire.
But the drugmaker just doubled down in the immunology and inflammatory markets, agreeing to buy Celgene’s fast-growing psoriasis drug Otezla for a whopping $13.4 billion in cash.