The winner of the Best Biotech CEO of the Year award goes to
Chief Executive Peter Meldrum.
Meldrum takes home the Swanson Trophy (named in honor of Robert Swanson,
( DNA) founding CEO) for pulling off one of the smartest drug licensing deals of all time.
Last May, Meldrum persuaded Danish drug firm
to fork over $100 million upfront in exchange for European commercial rights to Myriad's experimental Alzheimer's disease drug Flurizan.
It wasn't the biggest licensing deal of the year, but certainly the most well timed since a bit more than one month later, Flurizan was gone, the victim of a failed phase III study.
Unfortunately for Lundbeck, that $100 million payment to Myriad was non-refundable. Myriad lost Flurizan, which didn't really matter since very few investors thought it had any chance of working anyway, but the company got to keep the $100 million, which essentially recouped the cost of the phase III study.
Some might call Meldrum's deal making dumb luck. I call it brilliant. Myriad Genetics was already under pressure from investors to stop spending heavily on drug development, including Flurizan, because it was muzzling profits in the company's fast-growing genetic cancer testing business.
With the swipe of a pen, Meldrum essentially recouped the company's investment in Flurizan. When the Flurizan failed and Myriad announced that it was putting the drug on the shelf to focus on the diagnostics business, investors cheered and the company's stock went up.
How many times do you see a drug company's stock price go up after a phase III clinical trial fails? Answer: Not very often. With Myriad's genetics diagnostics base business doing very well, the stock has returned about 35% this year.
Meldrum was a relatively easy choice for this award, but that's not to say other chief executives aren't also deserving of praise.
By my count, there were about three dozen biotech and drug firms that managed to deliver positive returns for the year. That's a feat that deserves congratulations given the assault on the equity markets this year.
I don't have room to mention all the CEOs who created positive shareholder value this year, but I will highlight the top three:
CEO Fuad El-Hibri,
CEO Jean-Pierre Sommadossi and
( IDMI) CEO Tim Walbert.
A special shout-out for 2008 performance also needs to go to
CEO Harry Stylli. Sequenom is a diagnostics business, so I'm stretching the definition of my best biotech CEO award here, but then, I'm doing the same with Myriad Genetics, also a diagnostics business at its core.
Like my selection last week of
Kelly Martin as
2008's worst biotech CEO
, it takes more than just stock performance to get on the list.
Being acquired for a healthy premium sure gets notice, which is why
CEO Christoph Westphal deserves praise for selling out for $720 million to
On that same note,
Chief Executive Deborah Dunsire did right by her shareholders when she sold the company to
for $9 billion.
From the crop of big-cap biotech companies,
CEO John Martin deserves the most praise for continuous excellence, while
CEO Kevin Sharer wins comeback of the year honors.
Two other biotech chiefs are also deserving of mention. First,
David Hung negotiated a fat $250 million upfront payment from Pfizer for co-development rights to his Alzheimer's drug Dimebon.
Second, a conditional honorable mention goes to Brian Pereira of
. If the FDA approves AMAG's iron replacement therapy on Dec. 30, Meldrum may have to share the Best CEO trophy. Then again, if the FDA delays approval, Pereira might find himself an early contender for worst biotech CEO of 2009.
At the time of publication, Adam Feuerstein's Biotech Select model portfolio was long DNA, GILD, MDVN and AMAG. Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;
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