Having helped Biogen work its way through a slowdown in sales of MS powerhouse Tecfidera, Biogen exec Michel Vounatsos will now help the company find its path to the future as its new CEO.
The Cambridge, Massachusetts, biotech announced today that after doing a comprehensive search to replace departing CEO George Scangos, it had found the most suitable candidate within its own ranks. Vounatsos has served as Biogen’s chief commercial officer since April 2016 after a two decade career at Merck & Co.
“It was clear to us through a rigorous search process that Michel is that leader who can guide Biogen in the next phase of its evolution,” Biogen Chairman Stelios Papadopoulos said in a statement.
For his part, Vounatsos said, “It is an honor to be asked to lead this great company, one that has played such an important role in transforming the treatment of multiple sclerosis for patients globally.”
Not everyone was impressed with the decision. In a note to investors Monday, Bernstein analyst Ronny Gal said the firm's view is that the market with find the appointment "a bit underwhelming." That is in part because there has not been a significant change in Biogen's commercial performance since Vounatsos took over and because the "hope for a potential takeout" looks less likely.
Vounatsos did assume the commercial position at a difficult time for the biotech. That position had been vacated some months earlier by EVP Tony Kingsley after Biogen cut its 2015 sales projections, and then more than 800 jobs, after sales of Tecfidera fell short of analyst projections for several quarters.
In July, Scangos announced he would be leaving as soon as Biogen found his replacement. He has led the company since 2010. His announcement came after the company reported street-beating second-quarter results. Biogen repeated that scenario in the third quarter, when MS pricing grew 2.5% year-over-year, allowing the drugmaker to top consensus with a $2.28 billion in sales for the period.
Gal pointed out to investors last month that in the third-quarter earnings conference call, execs declined to discuss formulary access for 2017, even though contracting was mostly complete. He noticed that Vounatsos said Biogen was “committed to continue to generate profitable growth,” and that it intended to do that by “building a new go-to-market model” that would “go after the cost picture forcefully.”
Initially, that sounded to Gallike “pressure is coming and we are reducing our cost structure to handle it,” he wrote to his clients. But Biogen has since said that Vounatsos misspoke and that he did not intend to imply any issues with sales.
Editor's Note: The story was updated to reflect Biogen's statement to Bernstein analyst Ronny Gal that the company does not see any near term issues in sales for Biogen.