How did investors receive the news that Biogen hired Christopher Viehbacher as the company’s next CEO?
The reaction is decidedly mixed, with lots of strong opinions on both sides, according to an anonymous survey conducted by Mizuho Securities.
While one investor said Viehbacher was a “value destroyer at Sanofi” and another added that he’s “never done much,” there also was effusive praise for his work at the French pharma giant, which he guided from 2008 to 2014.
“He turned Sanofi around, including doing a smart deal with Genzyme,” said one supporter, who also called Biogen’s new chief a “very strong communicator.”
Heavily debated in 2011 when Sanofi paid $20 billion to acquire Genzyme, the deal signaled a shift in the Big Pharma landscape, setting the scene for future acquisitions by other companies. The calculated gamble drove growth and helped the aging Sanofi modernize.
The question now, according to some investors, is whether Viehbacher can pull off similar M&A success. To others, the question is whether he’ll be allowed to.
“Will he be given free rein to make partnerships/acquisitions?” asked one investor. “He’s the highest caliber person they could have gotten, but it will be interesting to see how much authority he has.”
Massaging the board of directors at Biogen will be key for Viehbacher, some investors suggest. At Sanofi, it was the board that eventually forced him out.
“He has experience navigating ‘complex’ board dynamics, which should help him be an effective leader at Biogen,” an investor said. “And his time as an investor brings a sharper [return-on-investment] focus to a large cap industry that often struggles in this area.”
That reference is to Viehbacher’s job the last seven years heading up his investment firm Gurnet Point Capital. During this period, he also led the board at hard-charging startup Boston Pharmaceuticals.
“He’s got a good nose for M&A,” one investor said.
Viehbacher will take over at Biogen after former CEO Michel Vounatsos failed in his attempts to market the controversial Alzheimer’s disease treatment Aduhelm. Vounatsos announced his departure in May after Medicare decided to limit coverage of Aduhelm to patients in clinical trials.
With Biogen possibly on the verge of getting a second crack at Alzheimer’s with its Eisai-partnered drug lecanemab, Viehbacher will have little time to ease into the job. His starting date is Monday.
Much could depend on the success of the newer antibody. One investor advises the new CEO not to “price lecanemab too high.” Another thinks the drug has enough potential to turn the company around by itself.
“Maximize the value of lecanemab,” the investor suggests. “And don't make any big acquisitions.”
Before tapping Viehbacher, Biogen was said to be courting former Johnson & Johnson R&D chief Mathai Mammen, M.D., Ph.D., as its next CEO. But he fell out of favor because of his desire to influence the future composition of the board, according to a report in Stat.
Meanwhile, the pressure is on as Biogen faces a financial decline. In the third quarter, the company reported (PDF) $2.5 billion in revenue, a 10% drop from the third quarter of last year as drugs such as Tecfidera, Spinraza and Avonex continue to slide.