Biogen CEO Tobin Quits in Surprise Move; Shares Drop
Bloomberg News
December 23, 1998, 11:30 a.m. PT
Cambridge, Massachusetts, Dec. 23 (Bloomberg) -- Biogen Inc., one of the world's biggest biotechnology companies, said Chief Executive and President James Tobin resigned, unexpected news that sent company shares tumbling as much as 19 percent.
Tobin, 54, will be succeeded by James L. Vincent, 59, currently Biogen's chairman. Vincent, who was president of the company from 1985 to 1994 and CEO from 1985 to 1997, said he expects to remain as CEO for one to two years.
Shares of Biogen, which reached a 52-week high yesterday, tumbled 7 7/8 to 79 in trading of 10.2 million shares, more than seven times its three-month daily average, and traded as low as 70 3/4.
Tobin's resignation "was initiated totally and solely by Jim. This was not connected with any other happening at the company," Vincent said.
Tobin and the company agreed not to elaborate on the reasons for Tobin's departure, Vincent said. "It will be my goal to evolve the replacement structure going forward out of the current management team," Vincent said in a conference call with analysts.
During Tobin's five years with Biogen, he helped mold it into one of the world's biggest and most successful biotech companies. Biogen has turned its multiple sclerosis drug Avonex into a blockbuster whose strong sales helped Biogen shares more than double this year, making it the best performer among large biotech companies.
Mary Ann Gray, an analyst with Raymond James with a "buy" recommendation on Biogen, said she was surprised that the news caused the stock to tumble.
"I think this is at worst neutral, at best slightly positive," she said. "The decline must be because it's a surprise. I think they just need to give people confidence that there is nothing wrong internally -- that Avonex sales are still on track and that earnings growth looks good." |
