Biogen has a lot on its plate. At the same time that its top products are facing tougher competition, the storied biotech is trying to secure approval for what could be a first-of-its-kind Alzheimer's disease drug. Now, the company must work through an executive change-up as well, announcing Tuesday that its finance head plans to step down next month.
Jeff Capello, who joined Biogen in December 2017 as chief financial officer, will be replaced with Mike McDonnell, who holds the same position at the healthcare information firm Iqvia. Capello is the second top executive to depart Biogen in less than a year, following Michael Ehlers, the former head of R&D who left in mid-October for the venture firm Apple Tree Partners.
While Biogen has found people to fill these roles, the exits have brought added uncertainty during one of the most pivotal times in the company's history.
Ehlers took his leave just days before Biogen shocked investors and the scientific community with plans to submit that Alzheimer's drug for approval. Two large studies of the drug, known as aducanumab, looked unlikely to succeed at first glance. But after further analysis, Biogen said there were enough positive results to pursue an approval. Some, though, have criticized the strength of those results and the ways the company evaluated them.
Capello's exit, meanwhile, comes right after the company officially submitted its aducanumab application to the Food and Drug Administration, and as it prepares a commercial launch of the drug.
Aducanumab is arguably Biogen's most important asset, responsible for a significant portion of the biotech's $46 billion market value. If approved, the drug would be billed as the first-ever treatment for what many researchers believe is the underlying cause of Alzheimer's — a title likely to result in billions of dollars in annual sales.
Approval is far from certain, however. The FDA has until early September to decided whether or not to accept Biogen's application for review.
Launching an Alzheimer's drug would be a financial boon for Biogen, given the threats looming over other parts of the company.
Biogen's top-selling drug, a pill for multiple sclerosis called Tecfidera, is at risk of losing patent protection. If that happens, it would severely cut the revenue Tecfidera brings in, which totaled more than $4.4 billion last year and accounted for almost 40% of the company's total revenue.
Another Biogen drug, Spinraza, is also under pressure. While Spinraza was the first and, for a time, only medicine approved for a rare muscular disorder known as spinal muscular atrophy, it now faces competition. Swiss pharma giant Novartis has brought a gene therapy to market, while an oral drug from Roche could soon gain approval in the U.S. as well.
With these challenges in mind, and against the headwinds created by the COVID-19 pandemic, Biogen revised its yearlong guidance during a second quarter earnings presentation Wednesday. The company now expects 2020 revenue to fall in the range of approximately $13.8 billion to $14.2 billion, rather than the $14.0 billion to $14.3 billion it had previously estimated.
"We expect some of those headwinds to continue into the back half of the year," Capello said on an earnings call Wednesday, adding that the "vast majority of the difference in guidance is due to the COVID impact."
"But I would also point out that we did see a significant strengthening of the business through the months of the second quarter, particularly if you look at the U.S. SMA business," he said.
Biogen didn't provide a reason for Capello's departure, which is scheduled for Aug. 15. The company did say, though, that Capello will stay on until Sept. 15 to help McDonnell's transition.