- Celgene Corp. disclosed on Monday that Scott Smith, its chief operating officer, is stepping down "effective immediately." His responsibilities will go to CEO Mark Alles.
- Smith joined Celgene in 2008, serving as vice president of global marketing for the biotech's inflammation and immunology (I&I) unit. In the following years, he jumped up to president of global I&I and, in April 2017, COO. Celgene did not explain why Smith was leaving.
- Notably, the departure comes about a month after the Food and Drug Administration refused to review an application for the biotech's highly anticipated multiple sclerosis drug, ozanimod. That setback followed slow sales growth for Celgene's psoriasis medication Otezla and a Phase 3 clinical failure for its blockbuster-hopeful mongersen.
More than 60% of Celgene's net product sales are rooted in its blood cancer drug Revlimid (lenalidomide), and nearly all the rest comes from just three other products: Pomalyst (pomalidomide), Otezla (apremilast) and Abraxane (paclitaxel).
The dynamic hasn't sat well with investors, who have urged Celgene to deepen its portfolio. To its credit, the big biotech recently inked acquisitions that fleshed out its pipeline with CAR-T candidates and, importantly, a late-stage blood disease treatment. It has also pushed several other drugs into advanced testing for a range of illnesses, from beta-thalassemia to myelodysplastic syndromes.
Celgene's efforts haven't been without complications, however.
Company shares dropped 8% in late February on news the FDA issued a Refuse to File letter for ozanimod, citing problems with the clinical and non-clinical pharmacology sections of the drug's filing. RTF letters can set an approval decision back years — an especially devastating effect for medicines like ozanimod, which analysts expect to fetch peak annual sales in the billions.
Another late-stage drug, mongersen, also faced setbacks. It failed to show enough efficacy in treating Crohn's disease, and Celgene ultimately scrapped development in that indication late last year.
Among products on the market, Otezla's strong rollout has since diminished. The drug achieved triple-digit sales growth in the first couple years after its 2014 FDA approval, but notched a more modest 25% increase in 2017, largely due to slower script volume in the U.S. Celgene knocked down its 2020 guidance in October after its net product revenues missed consensus.
Importantly, all those setbacks related to inflammation and immunology drugs, which fell under Smith's supervision until he took the COO role last spring.
Celgene didn't respond to BioPharma Dive's request for comment and didn't give many details about Smith's departure. Some had their hunches about the reasoning behind the decision, however.
"The way the press release is written totally reads to us as Scott's departure being effectively involuntary (again, to be clear the company has not confirmed this)," Mizuho analyst Salim Syed wrote in an April 2 investor note.
In a different note, Syed posted responses to a survey asking investors what they thought the reason was for Smith's exit. "Someone had to take the blame for the missteps," "There had to be a fall guy in all this," and "Does not bode well," were a few of them.
In addition to Smith's departure, Celgene also announced it is "modifying its executive team structure." To that end, Alles will be in charge of responsible for strategic leadership for several of the company's divisions, including its global hematology and oncology franchise, global I&I franchise and clinical development.