Investors welcomed the announcement that Biogen Chief Executive James Mullen will be leaving the company, with some saying he had lost credibility as a leader. The move came less than a month after the biotechnology company said its chairman would step down and just seven months after activist investor Carl Icahn succeeded in placing two members onto Biogen's board.
"We're happy," said Scott Harrison, an analyst at Argent Capital, which has $850 million under management and owns 365,000 Biogen shares. "There hasn't been a lot of confidence in Mullen's leadership, and this reminds folks that the moves made last year by Icahn are having some impact." Icahn was not alone in pushing for change at Biogen. In November, Healthcor Management LP, which owns about 3.65 million Biogen shares, slammed Mullen for selling more than $85 million of Biogen stock and collecting $63 million in compensation while doing little to enhance shareholder value. "We anticipate that Mr. Mullen's successor will be more focused on improving Biogen's research and development productivity and efficiency," Healthcor said in a statement. Mullen is set to retire on June 8.
Speculation is expected to pick up on whether the company, which makes the multiple sclerosis drugs Avonex and Tysabri, is preparing to sell itself. Biogen previously put itself on the market but found no buyers. Icahn accused the company of deliberately sabotaging the sale process. Now that process could open up again.
"You have the perfect story in terms of activist shareholders, a stock whose valuation is very attractive, and stock underperformance that has just made investors more eager for change," Harrison said. "So whether it's an acquisition by another company or bringing in a new CEO from the outside, change will be good."