After 14 years at the helm of Alder BioPharmaceuticals $ALDR, company co-founder Randy Schatzman is out in what the company calls a “mutual decision” with the board that it’s time for new leadership — just ahead of its first marketing application.
Schatzman will be temporarily replaced by Paul Cleveland, who was CEO at the gene therapy company Celladon before it crashed and burned in 2015, eventually serving as a shell for a reverse merger. Earlier he had been an executive at Aragon (apalutamide), acquired by J&J, which is what Alder prefers to focus on.
All niceties aside, Schatzman was bumped off the executive roster at a time that there have been some growing concerns about the biotech’s competitive stance. Alder is close to filing a licensing application for its CGRP migraine drug as it completes pivotal research work.
Investors weren’t pleased by the jittery move, though. Alder’s stock dropped more than 10% this morning.
Little Alder is well behind the two giants leading the CGRP migraine race: Novartis and Amgen, with Aimovig now under review. Earlier this year, Eli Lilly $LLY celebrated its Phase III results for galcanezumab, with a consistent 2-day reduction in monthly migraines. Teva is a player, but may be delayed by manufacturing issues. And Allergan $AGN has a late-stage program underway for an oral CGRP therapy it in-licensed from Merck in 2015 with a $250 million upfront.
Leerink’s Geoffrey Porges noted that the move to oust Schatzman comes after growing “frustration with the pace of progress, relative competitive position, and external disclosure at Alder, particularly in the last 12-18 months.”
This leadership transition may have been planned for a while but not publicly disclosed due to the potential shareholder concerns over a CEO leaving a company ahead of pivotal trial data. To us, this timing and disclosure, which obviously came directly from the board of directors, means that the company is free to openly recruit a leader with the requisite skills and experience or to secure the sale of the company.
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