Alexion CEO, CFO out amid Soliris investigation
- Shares in Alexion, a company specializing in ultra rare diseases, plunged by more than 15% in early Monday morning trading after the drugmaker announced the replacement of both its CEO and CFO.
- The leadership changes come amid an internal investigation into sales practices for its main drug Soliris (eculizumab), which has derailed the filing of Alexion's quarterly report for the third quarter.
- Alexion expects to file the Form 10-Q in January 2017 or earlier, although the Audit and Finance Committee investigation has not yet been completed.
David Brennan, a former CEO of British pharma AstraZeneca, will replace the exiting David Hallal in an interim capacity while Alexion searches for a new permanent CEO. Alexion said Hallal resigned for "personal reasons."
While former Honeywell CFO David Anderson will take the place of Alexion's outgoing financial chief Vika Sinha, who the drugmaker says is leaving to "pursue other opportunities."
The investigation into Soliris sales practices has not yet identified any facts which would require Alexion to update previously reported financials.
However, the departure of the company's CEO and CFO does not inspire confidence and the investigation, while nearing completion, remains ongoing. The company took an overly optimistic tone when announcing the departures, raising further red flags about what the investigation may have found.
Ex-CEO Hallal will certainly be well compensated for his departure. According to a form filed with the Securities and Exchange Commission, Hallal will receive $3.65 million over two years beginning January 2017. Sinha will be paid severance compensation, although Alexion did not include the amount in its filing.
Little is known about the investigation other than that a former employee made unspecified allegations regarding Alexion's sales practices for Soliris. The Audit and Finance Committee is examining whether employees "have engaged in sales practices that were inconsistent with Company policies."
Soliris — which treats paroxysmal nocturnal hemoglobinuria and another rare genetic disease — is considered the world's most expensive drug, costing approximately $669,000 per patient per year in the U.S.
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