David Hung, M.D., had a great year in 2016. For a good four months, he was the most popular CEO in biopharma, entertaining buyout interest from a who’s who in the industry. And Hung made the most of it: He parlayed Medivation’s prostate cancer med Xtandi and its pipeline, including PARP inhibitor talazoparib, into a $14 billion sale to Pfizer.
That was a nice premium for shareholders, and Hung was one of them—a big one. He was well-compensated for his year leading and selling the company, with $35.5 million in total 2016 compensation.
Hung walked away with a far bigger payout, thanks to his millions of options, stock and incentive-plan shares, accumulated over his years building up the company. But let’s look at his actual compensation first, rather than the deal windfall.
Hung collected a cash severance worth two years’ base salary, or $1.82 million, and a cash performance bonus of $868,015. His continued insurance benefits were worth more than $70,000. But the proceeds of his accumulated equity awards, at $32.9 million, made up the lion’s share of his walkaway package as unvested options and performance shares vested and paid out all at once.
Sum total: $35.5 million.
But Hung was in line for a lot more than that—more than $350 million, in fact. He had 2.84 million stock options, vested and unvested, worth $182 million in the Medivation sale. He owned 1.45 million shares outright, worth another $118.6 million. His incentive-plan share units amounted to 171,528, for a cash value of almost $14 million.
Then there were his stock appreciation rights, which, like options, benefit executives when share prices rise. They were worth $37 million.
Since Pfizer closed its Medivation buy, Xtandi has suffered a couple of setbacks, with sales slowing and study data—some of its own, some of it on Johnson & Johnson’s rival med Zytiga—calling its long-term expansion into question. Talazoparib is awaiting FDA approval, but the PARP drug class now has three approved meds, so competition will be fierce.
Meanwhile, Hung has landed another CEO job. He took the helm at Axovant Sciences, a biotech now centered on an Alzheimer’s drug picked up from GlaxoSmithKline, bringing a crew of ex-Medivation types with him.