Biogen Idec Research Chief Quits

The company says EVP Nabil Hanna has stepped down after an internal probe and SEC inquiry.
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Updated from 9:07 a.m. EDT

The resignation of a top research executive should have little or no long-term impact on

Biogen Idec

(BIIB) - Get Report

as far as Wall Street is concerned.

In fact, the company's stock was up 2 cents to $58.04 following the announcement late Wednesday that executive vice president for research, Nabil Hanna, had resigned.

The company, in a brief press release issued after markets had closed, said Hanna had resigned following an internal corporate investigation that was prompted by an informal inquiry by the

Securities and Exchange Commission.

The company said the informal SEC inquiry was related to the trading of securities by an unnamed third party. Biogen Idec then conducted its own investigation. Hanna's resignation "followed that internal review," the company said. It didn't provide details of its investigation. The company added that it isn't being investigated by the SEC.

"The short answer is 'No,' " said analyst Ron Renaud, when asked if Hanna's departure would have a major impact on the company, formed by the merger of Biogen and IDEC Pharmaceuticals in November 2003.

"Most of the interesting things are coming from the Biogen side, such as

the experimental multiple sclerosis drugAntegren," said Renaud, of Schwab Soundview Capital Markets.

He has an outperform rating on the stock. (He doesn't own shares; his firm doesn't have any investment banking relationship with the company). Hanna, who had worked for Idec, "has been relatively quiet and in the shadows" since the merger, Renaud said.

Antegren is being developed by Biogen Idec and

Elan

(ELN)

, of Dublin, Ireland. The companies say they expect to seek application for the drug's approval this quarter from both the Food and Drug Administration and from European Union regulators.

Hanna's responsibilities will be assumed by William Rastetter, executive chairman, and Michael Gilman, senior vice president of research.

Prior to the merger, Hanna was chief scientific officer at IDEC. He joined the company in February 1990 as vice president, research and preclinical development and became chief scientific officer in May 1998.

Hanna had "a strong influence on IDEC," especially in the development of Rituxan, a drug for non-Hodgkins lymphoma, said Jill Kiersky, a biotechnology analyst at Morningstar. "These will be big shoes to fill, but Biogen Idec will be able to fill them."

Biogen Idec co-markets Rituxan with

Genentech

(DNA)

.

Kiersky pointed out that Rastetter, who had been chairman and CEO at IDEC, "has a lot at stake to make this

merger a success because he did some very impressive things at IDEC." While Biogen Idec searches for a new research chief, Kiersky said the company's research efforts are in good hands with Rastetter and Gilman.

Morningstar gives Biogen Idec a three-star rating, the midpoint in its five-star rating system. (Kiersky doesn't own shares; her firm doesn't have an investment banking relationship with Biogen Idec.)