Biogen Idec CEO Jim Mullen Stepping Down, After Tumultuous Year of Shareholder Activism
[Updated 6:05 pm Eastern 1/4/10] Biogen Idec, the world’s largest maker of multiple sclerosis drugs and an anchor of Boston’s biotech cluster, is looking for a new CEO. The Cambridge, MA-based company (NASDAQ: BIIB) said today that longtime CEO James Mullen is stepping down on June 8, and also will be relinquishing his seat on the board at this year’s annual meeting.
Mullen, 51, joined the company in 1989 as director of facilities and engineering, and rose through the ranks on the business side over the next two decades. He became vice president of operations in 1992, and then ran Biogen’s international operations from 1996 to 1999. He was named CEO and president of Biogen in June 2000, and he has held both of those titles since the 2003 merger with San Diego-based Idec Pharmaceuticals.
Mullen presided over a period in which Biogen emerged as the world’s largest maker of multiple sclerosis drugs and one of the biotech industry’s leading companies. But it has recently come under fire from billionaire investor Carl Icahn for failing to deliver investment returns on par with its biotech peers, and for its inability to introduce any new marketed products since natalizumab (Tysabri) was approved by the FDA in November 2004.
Pressure from shareholders wasn’t a factor in Mullen’s decision to step down, says Tim Hunt, Biogen’s vice president of communications.
“After more than 20 years at the company, he’s retiring,” Hunt says. “He feels it’s the right time for a transition in leadership.” He said Mullen has “a good working relationship” with the board, and that the timing is right, because “the situation with Tysabri has stabilized,” and the company is confident in its pipeline of experimental product candidates. Tysabri, the hit MS drug, has had a tortured history because of its link to a rare, and potentially fatal brain infection called progressive multifocal leukoencephalopathy (PML).
Mullen will continue to earn a prorated portion of his annual base salary of $1.25 million through June 8, and will collect a bonus worth 125 percent of his base salary, Biogen said in a regulatory filing. All of his unvested stock options will vest on his retirement date of June 8. If the company is sold before his retirement date, Mullen will collect a severance payment worth triple his annual base salary and target bonus.
Biogen has started a search for Mullen’s replacement, and he said he will help the new leader with the transition.
Mullen noted in a statement: “I have had the opportunity to work with many talented and dedicated colleagues over the past 21 years, and I am proud of all that we have accomplished together. With our strong product portfolio, pipeline, global presence and financial profile, the company is well positioned to continue to enhance the lives of patients and deliver value to its investors.”
[Updated 6:05 pm Eastern with CEO pay details.] Biogen has endured a tumultuous year at the top, which intensified last May when Icahn mounted a proxy fight, urging shareholders to oust directors for what he called “failed leadership.” It was a blistering attack on Biogen’s marketing, dealmaking, research and development, and management. In his May proxy filing, Icahn pointed out that Mullen sold $85 million worth of his shares in the company at an average price of $59 a share since the merger with Idec. He noted that Mullen was paid $60.8 million in total compensation, combining salary, bonus, and stock options over the preceding five years, while Biogen’s stock declined from $66.61 to $47.63 in that time.
Icahn’s arguments had some sway with shareholders, as he won two of the four seats he campaigned for last spring, and since then, four more directors have resigned or announced plans to resign.
Separately, Biogen announced that it has added Caroline Dorsa as a director who will fill a term that expires in 2011. Dorsa is chief financial officer of Public Service Enterprise Group, and a former senior vice president of Merck.
Shares of Biogen climbed 36 cents to $54 in after-hours trading following the announcements.