
Biogen CEO Resigns After Six Years of Boom-and-Bust Leadership
Biogen (BIIB) - Get Report CEO George Scangos resigned Thursday, the latest and most significant executive exit at the struggling biotech company and a signal that bigger changes may be looming.
Scangos will stay on the job for a few months as Biogen's board searches for a successor, according to a statement released by the company in conjunction with second-quarter earnings.
Biogen's board appointed Scangos chief executive six years ago to replace Jim Mullen, the former CEO who had drew the ire of activist investor and significant shareholder Carl Icahn. Scangos was credited with refocusing Biogen around its core neurology and hematology businesses.
Under his watch, Biogen secured approval of Tecfidera, the blockbuster multiple sclerosis pill which sparked a new era of growth at the company.Biogen's stock price, aided by a booming biotech market, soared to new heights. Scangos was hailed as a hero.
But the good times did not last. Tecfidera's sales waned, forcing Biogen to rely on regular drug-price hikes more than finding new customers to grow its multiple sclerosis business. Biogen's research pipeline has failed to produce new blockbuster drugs.
As growth at Biogen slowed, its stock price sank. Key executives started to leave the company, including R&D chief Doug Williams and Adam Koppel, a former hedge fund manager tasked strategic development.
Scangos, once the turnaround hero, was increasingly facing the same criticisms about unfocused leadership at Biogen that ended the career of his predecessor Mullen.
Under Scangos, Biogen's stock price reached an all-time high last year, but as he departs, the stock is trading near a three-year low.
Investors will probably respond well to the Scangos exit because it likely means significant changes are in store at Biogen, including a potential sale of the company -- something that's been speculated for the past few months.
The Biogen board could also hire a new CEO and task him (or her) with going on an aggressive buying spree of its own, in order to restock the company's pipeline for growth. After the failure of a nerve re-growth drug earlier this year, Biogen's future has become even more reliant on an the high-risk Alzheimer's drug aducanumab.
Biogen shares closed Wednesday at $262.50 but are up 6% Thursday at close to $279.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.









