Biogen on Thursday named former Sanofi executive Christopher Viehbacher to replace Michel Vounatsos as its CEO, ending a six-month search for new leadership and putting the embattled biotechnology company on a new course after damaging setbacks.
Viehbacher, who led Sanofi from 2008 to 2014, will take over as Biogen’s head and join its board of directors on Nov. 14, the company said in a statement.
“Chris is the rare pharma executive who has a keen understanding of the complexities involved in running a multibillion-dollar global pharma business as well as a deep appreciation for the value of innovation,” said Stelios Papadopoulos, Biogen’s longtime board chairman.
An industry veteran, Viehbacher holds decades of experience with large pharmaceutical companies and small biotech companies. He spent 20 years at GSK before joining Sanofi, during which he helped reshape the company’s drug portfolio. During his tenure, Viehbacher closed Sanofi’s acquisition of rare disease specialist Genzyme and broadened an alliance with Regeneron that yielded the top-selling anti-inflammatory drug Dupixent.
But in 2014, Viehbacher was fired from Sanofi, amid a boardroom fight over his management. He went on to become the chairman of a well-funded, drug-hunting startup called Boston Pharmaceuticals and manage a healthcare investment firm known as Gurnet Point Capital that’s created and invested in several biotechs.
Viehbacher will be tasked with rebuilding Biogen, which last year won a controversial Food and Drug Administration approval for what was billed as the first drug to treat Alzheimer’s underlying cause. But the company had trouble convincing doctors and insurance companies of the drug’s worth, as the evidence supporting its use was conflicting and viewed by many as weak.
Sales of the drug, called Aduhelm, sputtered and were further limited by a restrictive decision from Medicare, the U.S. government insurance program for older adults, to limit coverage only to clinical trials. Biogen was forced to cut back the large sales infrastructure it had built to support what it expected would be a blockbuster drug launch, announcing layoffs and, in May, plans for Vounatsos to step down.
“It has been a privilege to lead this great company and work with so many outstanding people for nearly six years,” Vounatsos said in Biogen’s statement on Viehbacher’s appointment. “Biogen is at an important inflection point in CNS drug discovery and development. I am confident that Chris will be an excellent new leader of Biogen.”
Viehbacher’s job will be made easier by the surprising clinical trial success in September for lecanemab, another Alzheimer’s drug that Biogen is developing with partner Eisai. The treatment, which works in a similar fashion as Aduhelm, is already under review by the FDA for an accelerated approval, and could help Biogen turn around its fortunes.
Biogen's share price, which hovered around $282 as of Thursday morning, rose after positive lecanemab data were unveiled in September. Yet, it's still far from the price seen following Aduhelm's approval in June of last year, at which point shares traded at over $400.
Sales of almost all of Biogen's other drugs, meanwhile, are falling. Between July and September, Biogen recorded $2.5 billion in revenue, a 10% decrease from the same three-month period a year prior that affected nearly all of the company’s main products.
To analysts at the investment firm Stifel, the most important near-term events for Biogen investors are the presentation of more detailed lecanemab data, which should come in a few weeks, and late-stage clinical trial results for a rival therapy developed by Roche. As for Biogen's new CEO, the Stifel team doesn't have a clear takeaway.
"We're not exactly sure what to make of this hire, though it’s a little surprising," wrote analyst Paul Matteis in a note to clients. "[O]n the one hand he has extensive industry experience, including running Sanofi for six years; while on the other he has spent the better part of the last decade as an investor."
"A common speculation may be that this could bring more [business development] onto the table for [Biogen]," Matteis added, "but one has to also consider Biogen’s historically conservative board."
Brian Abrahams, an analyst at RBC Capital Markets, also saw Viehbacher's appointment as potentially supportive of greater dealmaking by Biogen, but noted that he will only serve on the company's board, rather than chair it.
Biogen shares rose by 2.5% in Thursday morning trading following the news.
Editor’s note: This story has been updated with additional detail and analyst commentary.