Dive Brief:
- Vertex has appointed Charles Wagner, a former finance head at Ortho Clinical Diagnostics, as its new chief financial officer, ending a tumultuous four-month stretch in which the company fired its interim CFO Ian Smith for undisclosed "personal behavior."
- Smith, who also served as chief operating officer, was filling the CFO role temporarily following the departure of Tom Graney in December 2018.
- Wagner previously served as CFO for three other companies in addition to Ortho Clinical. He will take over from Paul Silva, who became interim CFO after Smith was dismissed in late January. Silva will continue on as Vertex's corporate controller.
Dive Insight:
Wagner joins in turbulent times for Vertex, as the biotech and the U.K. National Health Service tussle over the price of Orkambi (ivacaftor/lumacaftor) for cystic fibrosis.
Smith, while CFO, had played what Wall Street analysts described as an important role in negotiating ex-U.S. prices for Vertex's cystic fibrosis drugs. Smith served as a member of a team, though, with his duties split among the rest of the committee following his departure.
The U.K.'s healthcare pricing watchdog National Institute for Health and Care Excellence (NICE) previously decided against recommending the drug on cost grounds. In the U.S., Orkambi costs $272,000 a year at list price, while in the EU Vertex negotiates the price with each member country.
In response to the NHS' objections, Vertex has fought back by requesting "urgent intervention" from the U.K. Prime Minister Theresa May, who is currently embroiled in negotiations over Brexit, and has made threats about Vertex's future in the U.K.
The impasse, which has now stretched for months, resulted in the destruction of nearly 8,000 packs of Orkambi which had expired during negotiations. Vertex had manufactured the packs in 2015 and 2016 for supplying 13 countries including the U.K., according to a March 25 letter Vertex sent to the Health and Social Care Committee of the U.K.'s House of Commons.
Investors have been closely watching to see who would fill the CFO role at Vertex, wrote Alethia Young, an analyst at Cantor Fitzgerald, in an April 2 note to clients.
"We think that Mr. Wagner is a strong CFO choice as Vertex becomes a larger commercial organization given his extensive background in corporate finance roles within healthcare, although not biotech," Young said. Young added Vertex does not intend to fill the COO role that Smith previously held.
Vertex shares were little moved on Tuesday.
