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December 12, 2008
The Worst Biotech CEO?
I'm pleased to note that Adam Feuerstein over at TheStreet.com has announced his first-ever "Worst Biotech CEO" award. In what was surely a contested field, he's named Elan's Kelly Martin as the winner. I was pulling for Ariad's Harvey Berger, who seems to have come close. Well, there's always next year - and yes, I do need to update the Ariad story soon.
Martin's win is a result of the troubles with the anti-Alzheimer's antibody bapineuzumab this year. When pivotal trial results came out back in July, they weren't too exciting. Investors, though, had been very excited indeed, and Elan's stock took a terrible beating as a result. According to Feuerstein, Martin's cheerleading for the drug was the reason for this unprofitable disconnect from reality.
He certainly wouldn't be the first CEO to beat the drum for his company's drug, but this kind of thing has a big risk of backfiring. How do investors believe you after they've been burned in this fashion? You don't want to have to depend on fresh crops of people who haven't heard your story yet. Alzheimer's is a tremendously difficult field to make headway in, and everyone who wants to buy into something in it needs to understand that. As an investment, such drugs are worth taking a flier on, but with a clear understanding that the odds are long. I think that Elan (and their partner, Wyeth) deserve credit for going after something as unusual as an immune-based therapy for the disease, but there's no excuse for making people think that it's working if it really isn't.
Anyway, be sure to check out Feuerstein's take, along with the comments on Vanda, Medarex, and other favorites. I hope he keeps this up year after year: there will never be any shortage of contenders.
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