Biogen knows what it's like to confront rebellious investors. Ten years ago, it faced a proxy fight with activist Carl Icahn that ended with two new directors on its board.
So in a way, it's no surprise that the biotech's Alzheimer's drug flop last month—and the spectacular drop in market cap that followed—prompted Biogen to add three new members to its board.
Chairman Stelios Papadopoulos said Biogen “heard the calls from our shareholders” and plans to expand its board to bring in new blood and new expertise. The board will grow to 14 seats from 11, with three nominees up for a vote in June: Catalent CEO John Chiminski, ex-Medtronic CEO William Hawkins and IBM exec Jesus Mantas.
The three new board members would help Biogen pick up the pieces after its aducanumab trial failure, which wiped about 30% off of the company’s market capitalization. Facing a barrage of analyst questions on the company's Q1 earnings call last week, CEO Michel Vounastos said the company has the “opportunity and obligation” to rebound from that setback.
To appease investors in the meantime, the company rolled out $5 billion in new stock buybacks, Vounatsos promised he'd keep scouting for potential pipeline-building deals.
On Monday, Vounatsos said the new board nominees have “diverse backgrounds and experience in scientific, medical, and digital innovation” that are “highly complementary to our pioneering vision.”
Chiminski is board chair and CEO of Catalent, the contract research and biopharma services company. Hawkins is a senior advisor at the life sciences private equity firm EW Healthcare Partners, but before that, he led the medtech company Medtronic. Mantas is managing partner and general manager at IBM Global Business Services, which helps companies weave digital into their operations.
Alex Denner, the activist investor who first joined Biogen's board after that 2009 proxy fight, said in a statement he’s “excited” about the appointments. Denner chairs Biogen’s corporate governance committee.
“Today’s announcement is a significant step in the board’s refreshment, and we will continue the process with a view toward further diversifying and enhancing the makeup of the board,” Denner added.
If Biogen amps up its digital ambitions after the aducanumab flop, as the nominations suggest it will, the company certainly wouldn’t be the first biopharma company to do so. Novartis CEO Vas Narasimhan and his predecessor Joe Jimenez both pointed to digital as a top goal, and the Swiss drugmaker now boasts its first chief digital officer in Bertrand Bodson. And Pfizer, Merck & Co. and GlaxoSmithKline have all recruited their first chief digital officers over the past couple of years.
Biogen executives said on last week’s first-quarter conference call the company plans to keep advancing its pipeline and scouting new drug candidates following its Alzheimer's setback. The company now focuses on multiple sclerosis, SMA and biosims, but it's planning to advance into ophthalmology, movement disorders, neuromuscular diseases, stroke and more in the 2020s, they said. The drugmaker still has ambitions in pain, Alzheimer’s and neurocognitive disorders as well.