What a difference a year made for Biogen ($BIIB) CEO George Scangos. After reaping a $4 million-plus cash bonus for 2014 performance, Scangos collected $1.2 million for 2015. And the difference lies with Biogen’s multiple sclerosis and hemophilia meds.
Scangos fell short on his earnings and revenue goals for the year, but still collected a high percentage of his target in those categories. He racked up a 140% payout on R&D goals. But his expansion plans in MS and hemophilia yielded a big fat goose egg.
Biogen didn’t disclose those exact goals for competitive reasons. But it’s clear that a slowdown in sales of Tecfidera, the high-flying MS blockbuster that soared in 2014, as well as slower-than-expected launches in hemophilia played a role.
In 2014, by contrast, Scangos far exceeded the company’s hopes for the MS franchises, with a 150% payout on his target bonus for that line item. The hemophilia target paid out 100%.
Overall, Scangos’ 2015 pay fell by less than $2 million, to $16.9 million from $18.6 million. His long-term stock awards--$13 million, a $1 million increase--helped make up the difference, as did an 11% increase in his base salary, to $1.54 million from $1.38 million.
As Tecfidera lost momentum last year--at least partly because of safety concerns--Biogen cut its full-year forecast and scrambled to put the MS franchise back on track. The company said it would cut more than 800 jobs and lower other costs to help fund stepped-up marketing on Tecfidera, including more spending on direct-to-consumer advertising. The company’s commercial chief, Tony Kingsley, made a quick exit, and analysts figured that the MS woes were to blame. Evercore ISI analyst Mark Schoenebaum concluded that Biogen “felt it needed a fresh set of eyes looking at the franchise,” and RBC Capital Markets analyst Michael Yee said, "[T]he company appears to be starting fresh, finding new leadership to reinvigorate things and holding folks accountable.”
That was last October, so the first quarter of this year was the first full period after the changes. Tecfidera advertising has certainly pumped up, but we’ll have to wait till Thursday for new sales numbers; that’s when Biogen reports its Q1 results.
A 2015 compensation package around $16 million is proving to be common for biopharma CEOs. Eli Lilly & Co. ($LLY) chief John Lechleiter, Amgen ($AMGN) CEO Robert Bradway and new-to-the-helm Giovanni Caforio at Bristol-Myers Squibb ($BMY) all collected pay in that range. That’s not nearly the top of the range, either: Horizon Pharma ($HZNP) CEO Timothy Walbert racked up $93 million, and a handful of pharma chiefs from Johnson & Johnson’s ($JNJ) Alex Gorsky to Shire’s ($SHPG) Flemming Ornskov brought in $20 million-plus.
- see Biogen’s 2016 proxy statement
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