Jeffrey Capello, CFO at Biogen since 2017, will step down in August, the company announced on Tuesday. He will be replaced by Michael McDonnell, CFO of contract research organization IQVIA. The company did not include a reason for Capello's departure.
The pharmaceutical giant on Wednesday shared its second quarter earnings, which topped $3.7 billion, exceeding Wall Street expectations and Q2 2019 results. Capello's departure wasn't addressed in the earnings report.
- Capello is the second executive to leave Biogen in less than a year, following Michael Ehlers, the former head of R&D who left in mid-October for venture firm Apple Tree Partners, BioPharma Dive reported.
When Capello started at Biogen, CEO Michel Vounatsos said he would be key to the company's efforts to seek out new business development opportunities, FiercePharma reported. With Capello's sudden depature, FiercePharma says, Vounatsos "seems to be signaling Capello isn't the right choice to drive the company's growth strategy going forward."
Earlier this month, Biogen submitted its experimental Alzheimer's drug, aducanumab, to the Food and Drug Administration for approval, BioPharma Dive reported. But the two late-stage clinical trials meant to showcase the drug's effectiveness produced mixed results. Only one of the tests met the main goal the company had set for it.
The results didn't stop Biogen from moving forward with its application for the drug’s approval, which would be a pivotal moment for both Biogen and Alzheimer’s research, as no drug has yet been found to treat the disease effectively.
In a note obtained by Barron's, Mizuho Financial Group analyst Salim Syed said Capello's surprise departure was "probably more bad than good for the stock." And If aducanumab is approved, Syed wrote, Biogen's stock price could jump more than $100 per share. "Capello's departure, if voluntary, doesn't exactly instill confidence that this is going to happen," he wrote.
Per the earnings report, Biogen's total product revenue dropped 3% from the second quarter in 2019, but other revenue jumped 155%, which the company credited to "revenues related to the license of certain manufacturing-related intellectual property to one of our corporate partners."
Also in the report, Biogen revised its yearlong guidance, writing it now expects 2020 revenue to range between approximately $13.8 billion to $14.2 billion, rather than its previous estimated range of $14.0 billion to $14.3 billion.
"We expect some ... headwinds to continue into the back half of the year," Capello said on an earnings call Wednesday. He attributed the "vast majority" of the difference in guidance to the impacts of COVID-19.
McDonnell brings extensive pharma business experience to his new role. In 2015, he joined Quintiles, which later merged with IMS Health to form IQVIA. The combined company completed three acquisitions between November 2017 and February 2019.
At several points during Capello's tenure, Biogen was rumored to be eyeing big deals, FiercePharma reported. In 2018, Biogen was hoping to acquire neurology drug maker Acorda, but the deal never came to fruition. At the time, Capello told analysts Biogen hoped "to bring in things close to revenue."
On this week's earnings call, CEO Michel Vounatsos echoed that sentiment. "We continue to be very active on the [business development and] M&A front," he said during the earnings call. "At the same time, we are very careful," he added.