- Alexion Pharmaceuticals on Monday named former Baxalta chief Ludwig Hantson as its new CEO, ending a months-long search for new leadership after the replacement of ex-CEO David Hallal and ex-CFO Vikas Sinha last December.
- Hantson had led Baxalta through the spin-off from Baxter in 2015 and previously served as head of Baxter BioScience and in several roles at Novartis. Alexion's board of directors expects to appoint interim CEO David Brennan as chairman of the board at an annual meeting scheduled for May 10.
- Alexion has been under the microscope ever since announcing an internal investigation into sales tactics for the company's best-selling drug Soliris (eculizumab). While no cases of improper revenue recognition were found, Alexion blamed management pressure and an inappropriate "tone at the top" for weakening financial controls.
At first glance, Alexion had a successful 2016, with topline revenues jumping 18% over the year prior. Sales of Soliris, which is approved to treat a rare blood disorder and an inherited disease caused by the formation of blood clots, increased by nearly 10% and Alexion is predicting double-digit overall revenue growth to continue in 2017.
But the investigation into sales practices for Soliris clearly rattled investors, who were concerned about shady financial reporting around a drug that accounts for over 92% of the company's net product sales. While fears of wider misconduct have turned out to be unfounded, Hantson will have to reinforce efforts aimed at boosting compliance and financial controls.
Hantson will also be tasked with ensuring continued growth for Soliris, while simultaneously building out a portfolio of drugs around that flagship franchise. Soliris' key composition of matter patent will expire in 2021, and regulatory data exclusivity expires in the U.S. in 2019.
In that context, an upcoming decision on approval of Soliris for treatment of refractory generalized myasthenia gravis has become even more important to ensure Alexion's top-seller remains lucrative while newer drugs mature. So far, however, Alexion's newer drugs and pipeline projects haven't delivered as expected.
Under interim CEO David Brennan, Alexion initiated plans to cut 7% of its workforce and pare back its R&D efforts to focus on Soliris and its most promising pipeline programs. The restructuring followed a decision to drop further development of a drug candidate acquired as part of an $8.4 billion acquisition of Synageva in 2015.
That deal also gave Alexion the enzyme therapy Kanuma (sebelipase alfa), but sales have been meager so far and totaled only $11 million in the fourth quarter last year.
Elsewhere, sales of Strensiq (asfotase alfa) have grown faster and the experimental ALXN120 could become a successor to Soliris in paroxysmal nocturnal hemoglobinuria.
Despite the worries around diversification, Alexion remains a top-tier biotech and is frequently flagged as a potential takeover candidate. The appointment of an experienced biopharma exec like Hantson could mean Alexion is less likely to be snapped up in the short-term, but if Hantson is able to build on Soliris' success, Alexion will likely keep turning up in possible pharma takeover lists.
Editor's note: A previous version of this article incorrectly stated Alexion expected to appoint Ludwig Hantson as chairman of the board of directors at an upcoming annual meeting. Hantson will be appointed to the board of directors while interim CEO David Brennan will be appointed as chairman.