|Alexion's New CEO Ludwig Hantson is making major executive changes|
By Mitchell Young
New Haven: In spite of unexpected sales and earnings growth announced by Alexion Pharmaceuticals [Nasdaq: ALXN] just weeks ago, the company’s stock has been dropping for most of the past month. The stock took a huge hit with a nearly 10% fall in value on May 23.
There may be a lot of action in the stores on Broadway, but when it comes to corporate board room drama, New Haven at least until now has been a sleepy little college town.
Well everyone is awake at 100 College Street, the one day stock dive followed the announcement that Ludwig Hantson, Ph.D., Alexion’s newly appointed CEO is making major changes in the C Level Suite.
Hantson was recently CEO of Baxalta of Bannockburn, IL and like Alexion it's a leader in treating rare disease. The company had sales of $6 billion when it was sold for $32 billion to Shire Pharmaceuticals [Nasdaq: SHPG] of Dublin, Ireland in June 2016.
Hantson's changes are substantial, CFO Dave Anderson will “resign”, at the end of August, the former Honeywell executive was first hired this past December. A search is underway for a replacement.
Martin MacKay, EVP and Head of Research and Development, will retire from Alexion at year’s end. Clare Carmichael, EVP and Chief Human Resources Officer, is leaving at the end of the month, as will Chief Commercial Officer Carsten Thiel, both to “pursue new opportunities.”
Thiel will be replaced by Brian Goff, a bioscience executive with extensive experience in blood disease, as the company’s new Chief Commercial Officer, effective June 1st.
Goff was most recently Chief Operating Officer of Neurovance of Cambridge, Mass., a biotech with a drug to treat Attention Deficit Disorder, the company was sold this March. Prior to Neurovance, he worked for Hantson as EVP of Baxalta and President of its $3.9 billion Hematology division.
Personnel changes at Alexion have been coming fast and furious for the past six months.
Co-Founder Leonard Bell resigned as chairman in April and David Brennan formerly CEO of AstraZeneca [NYSE: AZN] was named Chairman.
Brennan a then board member was first named interim CEO when the company jettisoned CEO David Hallal and CFO Vikhas Sinha last November after allegations of accounting irregularities were raised by a former employee.
After a two-month investigation, the company made a minor adjustment to its financials and in short order announced that revenues rose 24.1% year over year, to $870 million, exceeding Wall Street analysts’ expectations. The results showed that company efforts to continue to develop its flagship drug Solirs were paying off and some progress with acquisition drugs Strensiq and Kanuma were beginning to show as well.
Alexion said at the time it expects revenues to be $3.4 to $3.5 billion, with revenues for Soliris sales to be just over $3 billion for 2017.
With the bad news, ostensibly behind it, the company announced Bell’s retirement, Hantson’s hiring, a 5% trim in its workforce and the ascension of Brennan to chairman.
Wall Street seemed happy and the stock hit $133 per share on May 2, only twenty days later it traded at $102, before setting in at 104, a nearly $7 billion drop in value.
Blame It On Brazil or Maybe Kanuma
On May 8, Alexion's São Paulo offices were raided with officials claiming that the company subsidized lawsuits for patients to get access to its drug via Brazil's national health system and the stock began its decline.
Citing the raid, on May 23 Bronstein, Gewirtz & Grossman, LLC, a “boutique litigation firm” in NYC said it was launching an investigation for potential claims on “behalf of purchasers of Alexion stock.”
While the new CEO praised the outgoing executives, the company which expected to face new competition for Soliris in the next few years, [see Alexion: As A New Year Begins – The Future Is Suddenly Uncertain] has had difficulty making its $8.4 billion dollar acquisition of Synageva of Lexington, MA, to acquire the drug Kanuma meet expectations.
Kanuma which treats a very rare disease, is reportedly the most expensive drug available today. In February, British health regulators denied the purchase of the drug, citing its potential long term effectiveness and high costs. Last February the company estimated that sales for the drug would be $163 million in 2017, in the first quarter it had booked $12 million.