Biogen (BIIB) - Get Report promoted its current Chief Commercial Officer Michel Vounatsos to become the biotech company's next CEO.

The leadership change, announced Monday evening, caused Biogen shares to fall by 3% because an internal promotion signals little interest from outside candidates for what should be a coveted CEO job. It also downgrades the near-term Biogen "takeout" thesis.

Biogen has been searching for a new CEO since this summer when George Scangos announced his intention to resign. [Biogen's board let him go.]

Vounatsos joined Biogen in April as chief commercial officer following a 20-year career at Merck, where he ran the pharma's primary care business. He's now running the $60 billion biotech company.

"In seeking our next chief executive, the board sought a leader with a record in building commercial operations and a passion for science," said Biogen Chairman Stelios Papadopoulos. "It was clear to us through a rigorous search process that Michel is that leader who can guide Biogen in the next phase of its evolution."

Those are nice words from Biogen's long-time chairman, but they will likely ring hollow with investors, at least until Vounatsos proves to the Street that he can turn around Biogen for the better.

Biogen is desperate for a new blockbuster product to make up for lagging sales of Tecfidera amongst multiple sclerosis patients. Tecfidera is the biggest contributor to Biogen's top line but sales growth is expected to fall to 5% next year from 10% this year, according to analyst estimates compiled by Factset.

The company may have its next blockbuster product in Spinraza, widely expected to secure approval in early 2017 to treat a rare and fatal genetic disease in infants and small children. A priority for Vounatsos in 2017 will be to make sure Spinraza is approved and launches strong.

Vounatsos is not a science guy so he has to rely on Biogen's R&D apparatus, led by Michael Ehlers and Al Sandrock, to restock a pipeline that is thin beyond the risky Alzheimer's drug aducanumab.

Heading into Monday night, Biogen's stock price has only lost 9% for the year, which isn't bad compared to the dismal performance of Gilead Sciences (GILD) - Get Report , Alexion Pharma (ALXN) - Get Report and Regeneron Pharma (REGN) - Get Report . Still, Biogen's market value has grown increasingly disconnected from its fundamentals, propped up by speculation about a potential takeout and optimism (perhaps misguided) for its Alzheimer's drug candidate.

Biogen is expected to grow top-line revenue by 4% and earnings per share by 3% in 2017 compared to 2016, according to FactSet. That's anemic growth by big-cap biotech standards.

Slowing growth and a shaky pipeline forced Scangos out as Biogen's CEOr. Vounatsos deserves a chance to show he can do better, but he won't win over skeptical investors until he figures out a way to get Biogen growing again.

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.