20. Michel Vounatsos, Biogen

Biogen CEO Michel Vounatsos
Biogen CEO Michel Vounatsos got a boost in every category of his compensation in 2018, but the failure of Alzheimer's drug candidate aducanumab is setting him up for a much more challenging 2019. (Biogen)

20. Michel Vounatsos, Biogen
2018 pay: $16.17 million
2017 pay: $13.66 million
Change: 18%

Biogen CEO Michel Vounatsos’ appearance among biopharma’s highest paid CEOs may seem surprising in light of the company’s recent troubles. Its Alzheimer’s drug candidate, aducanumab, failed earlier this year, touching off an investor exodus. That failure was compounded by fears over flattening sales in Biogen’s flagship multiple sclerosis unit.

It was a jarring turn of events, considering it happened just after Biogen's board rewarded the CEO for the company’s 2018 performance. Vounatsos got a boost to every category of his compensation. His base salary was raised from $1.09 million to $1.28 million. The value of his stock awards jumped from $9.9 million to $11 million. All in all, it amounted to an 18% raise.

Vounatsos’ good fortune in 2018 came from one key product: Spinraza, Biogen’s drug to treat spinal muscular atrophy (SMA). Its sales came in at $1.7 billion in 2018, up from $884 million the year before. That helped push Biogen’s total revenues to a record $13.5 billion for the year. Spinraza is “one of the most impressive launches in the history of the biopharmaceutical industry,” argued the company in its proxy (PDF).

Spinraza’s successful launch helped cushion underperformance from other key products. The company’s MS revenues came in flat year over year at $9.1 billion, even though sales of Tecfidera flew past analysts’ estimates in the fourth quarter, coming in at $1.1 billion.

One reason for the boost: Vounatsos benefited in 2018 from a change to his annual bonus. The board raised his target annual bonus from 125% of base salary in 2017 to 140%—but it didn’t change the bonus plans of any of the company’s other four top executives.

According to the proxy, Vounatsos was rewarded not just for Biogen’s record revenues in 2018 but also for driving changes in the company’s “core processes to improve operating efficiencies, capital allocation and asset optimization.” The board also determined that he helped diversify the company’s pipeline by completing six transactions, including a $375 million option to acquire a stroke treatment from TMS. Biogen also raised its ownership stake in biosimilars joint venture Samsung Bioepis from 5% to just under 50% during the year.

Vounatsos could be facing considerably more challenges in 2019, however. With the failure of aducanumab, Biogen is under pressure to retreat from Alzheimer’s and pursue more promising pipeline projects, which it may have to acquire. Meanwhile, it will be facing new competition to Spinraza, as Novartis won FDA approval in May for its gene therapy to treat SMA.

20. Michel Vounatsos, Biogen

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