A Lost Decade? Sharer To Retire As Amgen CEO

A Lost Decade? Sharer To Retire As Amgen CEO

December 19th, 2011 // 4:25 pm @

After a tumultuous decade running one of the biggest biotechs in the land, Kevin Sharer will retire as ceo in May and leave his post as chairman at the end of next year. He will be replaced by Robert Bradway, 48, who is currently president and chief operating officer. The move comes earlier than some expected, since Sharer is 63 years old, although his age was not noted in the Amgen press release.

His tenure has been marked by a series of ups and downs, but critics say there were more downs than ups. On the plus side, Sharer presided over growth in sales – from $16 billion from $3.6 billion in 2000. And he oversaw the 2002 launch of Neulasta, which is used to reduce infections in patients on chemotherapy and has become the biggest-selling drug in the Amgen portfolio with nearly $3.6 billion in sales last year.

However, Sharer also presided over a large series of setbacks. Over the past four three years, there were FDA warnings over health risks associated with the Aranesp and Epogen anemia meds and reduced Medicare reimbursement. Congress investigated marketing practices. The SEC probed a failure to disclose that a key clinical trial ended over safety concerns. Recently, the biotech took a $780 million charge as part of its hope to settle various civil and criminal marketing probes (look here).

At one point, he was named one of the worst ceo’s and an Internet petition was circulated demanding his resignation(see this). More recently, he was declared one of the most overpaid ceo’s (read here), and one analysis noted his most recent pay boost was approved by using the controversial practice of peer benchmarking (look here).

Through it all, Sharer dismissed his critics. He famously declared there was no crisis, which did not surprise those who know him, since he keeps a portrait of the famously stubborn English admiral Horatio Nelson in his office (back story). However, he did cause some consternation by refusing to immediately end an affair with a married Amgen vp. The romance fizzled when she left the company.

To appease investors, Amgen finally agreed earlier this year to declare its first quarterly dividend and began a $10 billion buyback program. For some, these moves were welcome, but a case of too little, too late. During his tenure, Amgen stock yielded an annual return of 0.5 percent, compared with a 4.3 percent notched by his predecessor, according to Bloomberg News.

“This is a dream come true. I knew this would happen, but Kevin told me personally, that he would definitely retire when he reached 65 not a year early, but that’s just fine,” says Steve Silverman*, retired insurance executive who holds an undisclosed amount of Amgen stock in a family trust and who has been a long-standing Sharer critic, beginning with the 2001 acquisition of Immunex. “I am hoping for a new Amgen era. It sure looks like it.”

As part of that new era, Roger Perlmutter, 59, will retire as exec vp of R&D in February and Sean Harper, 49, will move into that spot. Like Sharer, Perlmutter joined Amgen in 2000, and he previously worked at Merck. Harper is currently senior vp for global development and chief medical officer. The new management team faces some stiff challenges, though.

“What I think Bob Bradway needs to do is shake up the culture at Amgen, to reinvigorate a focus of innovation for new products and a focus on cutting expenses,” RBC Capital Markets analyst Michael Yee tells Bloomberg News. “This company has not had a successful history of business development.”


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