David Schenkein, the longtime CEO of Agios Pharmaceuticals, will step aside next year after transforming what was once a high-risk Cambridge, MA-based startup into a public biotech with over 500 employees and two drugs on the market.
Schenkein’s replacement will be Jacqualyn Fouse, former president and chief operating officer of Celgene (NASDAQ: CELG) and a current Agios boardmember. Schenkein will become executive chairman. The handover will take place Feb. 1, the company announced today.
“The CEO role is a 24/7, 365-day-a-year role, and I’m at a stage in my career where I want to think about a different balance in life,” the 61-year-old Schenkein (pictured) told Xconomy. “It’s the right time for the organization and for me personally.”
The announcement comes as Agios (NASDAQ: AGIO) is launching its first wholly-owned medicine, the acute myeloid leukemia drug ivosidenib (Tibsovo).
Fouse’s appointment reinforces the strong ties between Agios and the Summit, NJ-based Celgene, which struck the first major partnership with Agios back in 2010. Celgene owns the rights to Agios’s first marketed drug, enasidenib (Idhifa).
Fouse left Celgene in mid-2017. She knows Agios well, having run Celgene’s hematology and oncology business for almost two years. She joined the Agios board in December. Schenkein says Fouse “raised her hand” once he made it known he wanted to step back from the CEO role. He says the switch isn’t the result of issues with the direction of the company. “She’s just an ideal and extraordinary leader,” he says. “There’s nothing she needs to come in and immediately fix.”
Schenkein, a native of Queens, NY, began his career as a physician. He crossed over to industry and climbed the corporate ladder at big biotech organizations on both coasts, Millennium Pharmaceuticals in Boston and Genentech in San Francisco. At Millennium, he headed up development of bortezomib (Velcade), a life-saving drug for the blood cancer multiple myeloma. At Genentech, Schenkein ran the firm’s cancer drug portfolio for nearly four years.
In 2009, Schenkein left Genentech to run Agios, then just a startup in the unproven field of cancer metabolism, an area of research that focuses on how tumors feed themselves and grow. Schenkein took the job on the condition that Agios would have the financial support to evolve into a long-term, independent company, not a quick flip. “It had the feel of ‘go big or go home,’” he told Xconomy in 2013.
Schenkein has joined the thin ranks of biotech CEOs to take a company from fledgling startup to a seller of marketed drugs. Agios didn’t have a drug close to human testing when Schenkein took over. But he helped steer Agios into a big partnership with Celgene in 2010, began laying the groundwork for an IPO the following year, then took the company public in 2013. Agios was an early beneficiary of this decade’s biotech IPO boom, raising $106 million in July 2013 with no evidence that its drugs worked in humans. Its shares closed Friday at $80.72 apiece, some 4.5 times their $18 IPO price.
Since going public, Agios has moved fast. Agios developed enasidenib and ivosidenib, medicines targeted to acute myeloid leukemia patients with particular genetic profiles. Enasidenib and ivosidenib were approved in 2017 and 2018; each approval came after four years of clinical testing. It typically takes eight years for a cancer drug to go from the start of its first trial to approval, according to the American Cancer Society.
With all its progress, Agios has yet to turn a profit. It lost $68.7 million last quarter alone after losing $314.7 million in 2017. Celgene owns full rights to enasidenib, which generated $31 million in the first half of 2018. The launch of ivosidenib—fully owned by Agios—will be critical to the company’s success, as are its efforts to develop other drugs for cancer and other diseases.
Becoming profitable quickly “has never been a focus of mine,” Schenkein counters. “We could become profitable pretty quickly by paring down all the great research that we’re doing. The focus for me has been, how quickly can we bring medicines to patients that need them?”
The company is also working with Celgene on cancer immunotherapies, and has a drug for a rare type of anemia in late stage testing.
Schenkein is hesitant to talk about the future, given he’ll still run Agios through early 2019 and wants a smooth transition to Fouse. But even if Schenkein isn’t running another biotech in the future, don’t expect retirement. “I’m not a person who tends to sit around idly,” he says.