[Updated 3/21/18, 8:42 a.m. EDT. See below.] Alder BioPharmaceuticals is now looking for a new chief executive, just as the company readies plans to file for FDA approval of its lead drug for migraine headaches.
Randy Schatzman (pictured above, right) is out as Alder’s (NASDAQ: ALDR) CEO, the Bothell, WA, company announced Tuesday after the markets closed. Schatzman also resigned from the company’s board of directors. In his place, Alder has appointed board member Paul Cleveland to serve as interim CEO. Cleveland will also keep his board seat. A spokesman for Alder said the company would not comment beyond the press release.
Though the executive change was announced Tuesday, Schatzman’s employment with Alder ended last Thursday, according to a securities filing. Schatzman’s departure from Alder’s top post was a “mutual decision,” the filing says.
Schatzman was the only chief executive Alder had known. He co-founded the company in 2004 and led it to an initial public stock offering ten years later. Under Schatzman’s tenure, Alder developed eptinezumab, a migraine headache preventing drug. The injectable drug is part of a new drug class called calcitonin gene-related peptide (CGRP) inhibitors. These drugs block a protein believed to play a role in the transmission of pain.
Alder has positive results in Phase 3 studies testing eptinezumab in episodic migraine, between five and 14 headaches per month, as well as chronic migraine, defined as having 15 headache days or more per month. After releasing the chronic migraine results in January, Schatzman said the company was on track to file for FDA approval in the second half of the year.
Schatzman will still have some say in Alder’s plans for the migraine drug. According to the securities filing, Alder expects to enter a separation and consulting agreement with Schatzman that calls for him to consult for the company for 18 months. Schatzman will be paid a severance equal to 18 months of his current base salary and monthly annual target bonus, according to the filing. The company will also cover the the health insurance payments for Schatzman and his dependents through the end of the severance period.
[The following two paragraphs added to include analyst comment.] In a research note, Leerink Partners analyst Geoffrey Porges said that some investors may view the executive change as positive due to frustration with Alder’s progress, and the company’s position relative to its competitors. Amgen (NASDAQ: AMGN), Eli Lilly (NYSE: LLY), and Teva Pharmaceutical (NYSE: TEVA) have all filed for FDA approval of their CGRP migraine drugs. A decision on Amgen’s drug is expected in mid-May. Porges said that he had no information indicating that Schatzman was an obstacle to a sale of Alder, but added that the executive’s departure makes the potential sale of the company more likely.
“This leadership transition may have been planned for a while but not publicly disclosed due to the potential shareholder concerns over a CEO leaving a company ahead of pivotal trial data,” he wrote. “To us, this timing and disclosure, which obviously came directly from the board of directors, means that the company is free to openly recruit a leader with the requisite skills and experience or to secure the sale of the company.”
Cleveland’s previous CEO experience includes posts at Adverum Biotechnologies and Celladon Corporation, where he had also served as CFO. In a prepared statement, Cleveland said Alder expects to report additional data for eptinezumab in the first half of the year. He also said that filing for FDA approval of the drug is Alder’s “top priority.”