After bringing in a new CFO this summer—and as it navigates a turbulent stretch—Biogen is giving former chief finance officer Jeff Capello a multimillion-dollar cash payment plus other severance benefits.
Capello served as Biogen’s CFO from December 2017 to August 2020, and this week, the company said it’s giving the former exec a $2.6 million cash payment in addition to full severance benefits. And the company’s compensation committee is waiving a requirement that he repay 35% of his $520,000 cash sign-on bonus.
The company’s executive severance policy calls for a lump sum payment, continued medical insurance and up to 12 months of executive outplacement services. For Capello, given that he's served less than three years at the drugmaker, the lump sum payment will amount to 16 times his monthly compensation, including bonuses.
Biogen didn’t give a reason for Capello’s departure when it unveiled the CFO switch back in July, but on a quarterly earnings call at the time, the company’s top brass outlined a need for deals to build its pipeline and fuel growth.
Capello's replacement, Michael McDonnell, is former CFO of contract research organization IQVIA. McDonnell brought dealmaking acumen to the new role, having completed three acquisitions between November 2017 and February 2019 at IQVIA. Before that, he joined Quintiles in 2015, which merged with IMS Health the following year to form IQVIA.
For Biogen, a recent patent loss on key multiple sclerosis drug Tecfidera could add urgency for M&A. Biogen lost a case against Mylan in June, and the generics maker launched its copycat in August.
Things took a turn for the worse last week when a judge in Delaware ruled against the company in a decision that could enable other generics to launch. Because of that ruling, Biogen will likely lose the majority of Tecfidera’s U.S. sales, which clocked in at $3.3 billion last year, Bernstein analyst Ronny Gal wrote last week. Tecfidera was the company's top medicine by sales in 2019. Biogen said it's appealing the decisions.
Meanwhile, the Tecfidera issues put more pressure on Biogen to deliver with controversial Alzheimer’s disease drug candidate aducanumab. The company stopped a phase 3 trial on the drug last March, but later said a larger data analysis warranted an FDA filing. Biogen submitted the drug to the FDA earlier this year and has a March 7, 2021, target decision date at the agency.
On Biogen’s July conference call, CEO Michel Vounatsos pointed out that together with Capello, the team “delivered on 18 deals,” though most were for early-stage programs. He said aducanumab is the company’s “one big hope” until those early-stage research projects advance toward the market in 2024 or 2025.
Aside from those medicines, Biogen has been generating blockbuster revenues with spinal muscular atrophy medicine Spinraza, which won approval in late 2016. Looking forward, drug will come under new pressure from Roche's Evrysdi, which just won FDA approval and can be administered in a patient's home.