Bluebird Bio chief Leschly pulled down $24M in 2018. But can he make it pay off?

Bluebird Bio opened its first manufacturing facility in Durham, North Carolina, where it will make its cell and gene therapy treatments. (Bluebird Bio)

Biotechs are taking over the world—of executive pay, at least. Bluebird Bio chief Nick Leschly racked up a pay package worth almost $24 million for 2018, beating out every Big Pharma CEO. And the company doesn’t even have an approved drug yet.

The gene therapy specialist didn’t have a great year with investors, either. Shares peaked in March at $232 per share, a couple weeks before Celgene opted to co-promote its CAR-T med bb2121, but by year’s end had dropped to just over $97.

But only a sliver of Leschly’s 2018 haul came in cash, which means the company will have to hit some performance goals—and shares will have to recover—for the CEO to convert that pay into a payoff.

Leschly collected a $610,000 salary, a 9% raise, and his incentive pay clocked in at about $466,000, a little over his target bonus, thanks to some pipeline progress that the board’s compensation committee called “significant.”

That’s a total of just over $1 million, leaving about $22.9 million in stock and option awards to make up the difference. His $23.9 million total is almost three times his 2017 pay of $8.7 million.

RELATED: Bluebird tees up its first gene therapy approval with Zynteglo thumbs-up in EU

And here’s where the stock recovery comes in. Bluebird granted his 2018 shares and options to Leschly last January, before the stock hit its March high, but well above its post-tumble price—a fact the company’s proxy statement takes pains to point out. “Mr. Leschly will not realize any value from his stock option grants unless our share price increases above the exercise price on the date of grant,” the proxy states.

A couple of upcoming events could make the difference. The company’s beta-thalassemia gene therapy, Zynteglo—aka LentiGlobin—is finally nearing its first regulatory approval, albeit in Europe. The therapy snared committee backing at the European Medicines Agency, setting Zynteglo up for an approval this quarter. And Bluebird expects to file the therapy for FDA review by the end of the year. That’s a big step forward for a product that has faced its share of setbacks, including early-stage trial data that prompted Bluebird to overhaul its manufacturing process.

RELATED: Bluebird’s anti-BCMA has a ‘clear lead’ in a crowded field

That fix appeared to work, and Bluebird has since invested $80 million in a new manufacturing facility designed to scale up for Zynteglo production if and when it nabs FDA approval. As for the European launch, it has a deal with Novasep to produce gene therapies at a site in Belgium.

Analysts are looking for sales of up to $1.1 billion, provided Zynteglo also wins an indication in sickle cell disease. But Bluebird will have to clear some hurdles along the way, not the least of which is pricing and reimbursement. As a gene therapy, Zynteglo is expected to bear a price well above $1 million and perhaps $2 million-plus. The company is working on a payment model that would spread the cost over time, but whether payers will sign up remains to be seen.

And then there’s the matter of setting up treatment centers qualified to deliver the complex therapy, which could prove a bottleneck between Bluebird and the patients it wants to treat.

RELATED: Bluebird opens manufacturing facility as it moves gene therapies forward

With millions in stock and options on the line, Leschly will certainly be motivated to drill through those obstacles. And as a biotech CEO, he has plenty of company in the top ranks of biopharma’s highest-paid. As it stands now—with several proxies left to surface—Leschly stands in fourth place, with fellow biotech chief John Oyler, of BeiGene, in second with almost $28 million.

Other newcomers to FiercePharma’s highest-paid list include Seattle Genetics’ Clay Siegall ($18.1 million) and Alkermes CEO Richard Pops ($17 million, PDF); among the usual suspects, we have CEOs at Gilead, Amgen, Alexion and Celgene already ranked, and Vertex CEO Jeffrey Leiden and Regeneron chief Len Schleifer likely contenders when those companies file their proxy statements.

Where does that leave Big Pharma? With about half its CEOs off the list. For several years now, salary surveys show salespeople at biotech companies out-earn those who rep Big Pharma drugs. It appears biotech CEOs are doing the same.