Staggered by a series of late-stage setbacks capped by the FDA’s refusal to accept its application on their leading late-stage drug and looking vulnerable on its numbers, Celgene CEO and chairman Mark Alles is revamping the leadership structure at the wobbly biotech.
Number one on the to-do list: Scott Smith is out as president and COO, with immediate effect. He’s not retiring or off in search of new opportunities. He’s just out.
The management revamp will leave Alles in charge of everything from clinical development to regulatory, the all-important hematology and oncology franchise as well as inflammation and immunology.
Reporting directly to him: Nadim Ahmed, president, global hematology and oncology; Terrie Curran, president, global inflammation and immunology; Jay Backstrom, chief medical officer and head of global regulatory affairs; and Joanne Beck, executive vice president, global pharmaceutical development and operations.
And the reorganization appears to still be under way. Jefferies’ Michael Yee noted Monday night: “The company is reorganizing its executive team in the meantime, and we could hear several hires/promotions over the coming months.”
The move comes shortly after Bob Hugin’s departure as executive chairman of the company he ran to great acclaim for years. But the applause has quieted significantly over the past year. Celgene’s $710 million cash roll of the dice on the inflammatory bowel disease drug mongersen (GED-301) came up snake eyes in Phase III last fall. Most recently the FDA rejected Celgene’s application for ozanimod, an embarrassment for a company that prided itself on its ability to execute effectively.
That could have been forgiven easily enough, but investors have been alarmed over weak financials underscoring the company’s extraordinary dependence on Revlimid and the big, regular price hikes it needs to keep on top of the game. Revlimid’s patent position is also under assault.
Just week’s ago Baird’s Brian Skorney noted that repeated snafus have created a situation where “investors are hesitant to get back into what was once biotech’s poster child for continued growth and solid execution.”
Alles wants it all back, and he now has final responsibility for all of it.
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