6. Nick Leschly, Bluebird Bio
2018 pay: $23.96 million
2017 pay: $8.76 million
Bluebird Bio chief Nick Leschly beat out every Big Pharma CEO with a pay package worth almost $24 million for 2018. And the company doesn’t even have an FDA-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 of weeks before Celgene opted to co-promote its CAR-T drug bb2121, but by year’s end had dropped to just over $97.
For Leschly to convert his pay into a payoff, though, the company will have to hit some performance goals—and shares will have to recover, too.
That's because the Bluebird chief's pay came mostly in the form of equity. He collected a $610,000 salary, a 9% raise, and his nonequity incentive pay clocked in at about $466,000, thanks to some pipeline progress that the board’s compensation committee called “significant.” That leaves about $22.9 million in stock and option awards to make up the difference.
His $23.96 million total is almost three times his 2017 pay of $8.76 million.
And here’s where the stock recovery comes in. Bluebird granted Leschly's 2018 shares and options 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, nabbed a European OK in early June. And Bluebird expects to file the therapy for FDA review by the end of 2019. 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.
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.
With millions in stock and options on the line, Leschly will certainly be motivated to drill through those obstacles.