The Scangos legacy: A blockbuster MS record with lingering doubts about the pipeline
Six years ago, George Scangos was recruited to head a turnaround team at what was billed as a troubled Biogen. And it wasn’t long before a big approval for a new multiple sclerosis blockbuster triggered a round of applause—and a bullish surge in the company’s stock price—that lasted for years.
Today, Scangos says his time is up at Biogen, well after the applause petered out last year and the market began to grow restless over the CEO’s less successful second act in a bearish market. In the next few months, he’ll step aside, once his successor can be found to helm the influential Big Biotech, an institutional landmark inside the Boston/Cambridge hub.
In some ways, he’s leaving Biogen $BIIB in the same shape he found it, either the target of a potential buyout or in need of a substantial acquisition or some other pipeline move that can regenerate excitement in the company’s future. As Scangos isn’t sticking around to execute an anticipated deal, you can expect to hear plenty of speculation that it’s more likely that Biogen could be bought. This next CEO will step in during a turbulent, uncertain phase in the company’s long history.
During his tenure, Scangos made Tecfidera the new top earning drug at Biogen, building up the company’s MS portfolio and wielding huge influence over that sector of the market. Biogen was frequently cited alongside Celgene and Gilead as an example of the new breed of Big Biotech, capable of developing important new drugs while racking up major sales growth. But the company’s relentless insistence on success ran into some grumbling last year, when eroding growth in the big MS franchise forced the management team to lay off more than 800 staffers in a big reorganization.
Scangos leaves behind a pipeline that has huge potential, but plenty of lingering doubts. In a swing-for-the-fences strategy, Biogen tackled Alzheimer’s, perhaps the single biggest frustration in R&D, with a new drug called aducanumab. That drug is now in a late-stage study after scoring some mixed early results. (In Alzheimer’s R&D, which has known little but defeat over the past decade, mixed early results for a drug that targets amyloid beta is considered quite an achievement.)
Biogen’s hopes for stirring some excitement for the pipeline, though, hit a bitter setback just a few weeks ago. A Phase II study of its MS drug opicinumab (anti-LINGO-1) failed a Phase II study and left analysts unimpressed at Biogen’s seemingly far-off set of pipeline catalysts. Once again, its shares were badly damaged.
Scangos is leaving shortly after key members of his turnaround team moved on to new projects in biotech. R&D chief Doug Williams left to start Codiak last year. Steve Holtzman, head of corporate development, jumped ship at about the same time and is now running Third Rock’s startup Decibel.
Scangos himself remains an outsized figure in biotech. He has a long resume in drug development and will likely remain an influential—though lower profile—player long after his successor has been named. In biotech, retirement is usually the step you take before starting your third act.
He hinted at that third act in a statement:
“This is the right time for a new leader to take the reins and lead Biogen through its next stage of development, and I look forward to returning to the West Coast to take on one more set of activities and spend more time with my family.”