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July 21, 2016

Biogen CEO Scangos Stepping Down

  • George A. Scangos, Ph.D., will step down as CEO of Biogen “in the coming months” once a successor is identified, the company said today.

    Dr. Scangos, 68, steered Biogen through several product launches that helped grow the company’s revenues, earnings, and stock price during his tenure. Sales more than doubled during his tenure, to $10.8 billion in 2015.

    But over the past year, Biogen reduced its workforce by 11%, or about 880 employees, in a restructuring that included termination of several pipeline drug development programs.

    The restructuring followed a slowdown in sales of its drugs, including its biggest-selling product, the multiple sclerosis treatment Tecfidera® (dimethyl fumarate). Results for Tecfidera remain mixed: During the second quarter, Tecfidera revenue grew 12% year-over-year, to $987 million. However, that falls short of the $991 million average projected by analysts surveyed by Bloomberg News.

    Biogen in recent months has also named new managers to head its sales and R&D operations, and has sought to narrow its therapeutic focus to neurological and opthalmological treatments. Last month, Biogen said it would continue clinical development of opicinumab (anti-LINGO-1) despite the multiple sclerosis (MS) candidate missing its primary endpoint in the Phase II SYNERGY trial, citing data it said showed signs of possible efficacy.

    In May, the company said it will spin off its hemophilia business as an independent, publicly traded company—a spinoff the company said is expected to occur early next year.

    Michael Yee, an analyst with RBC Capital Markets, told Bloomberg that Dr. Scangos’ departure was not unexpected: “This is one where people thought there could be change given all that has gone on in the past year or so.”

    Dr. Scangos has served as CEO since 2010, when he succeeded James Mullen as chief executive of what was then called Biogen Idec. Before joining the company, Dr. Scangos was CEO of Exelixis, and earlier served as president of Bayer Biotechnology,

    “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,” Dr. Scangos said in a statement.

    Biogen disclosed Dr. Scangos’ coming departure as CEO in a press release announcing second quarter results. The company finished Q2 with a 13% year-over-year increase in GAAP net income, to $1.05 billion, on total revenues that rose 12% during the period, to $2.894 billion.

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