Turnaround trio: Marketing boss Tony Kingsley, research chief Doug Williams, and CEO George Scangos have made Biogen Idec a favorite of investors.  Recruiters often reached out to George Scangos, a confident, analytical type who three years ago was running a small biotech company in South San Francisco. On this winter day the headhunter had something that was more intriguing than usual–the prospect of leading a much bigger drugmaker. She wouldn’t say which one, but Scangos says it was obvious, “if you had half a brain.”  Only one company in his industry had a CEO being savaged by Carl Icahn in a proxy battle, while its top-selling drugs were facing competition and safety controversies. The top job at Biogen Idec? No, thanks. “It just didn’t seem like that great a situation to me,” Scangos says about the call.  But in the weeks that followed, Scangos found himself slowly coming around. First, there was Biogen’s history as one of the first and best biotechnology companies ever, founded in 1978 in Geneva by some of the world’s top biologists, inspired by the creation of Genentech two years before. One founder, Wally Gilbert, won the Nobel Prize in Chemistry while he was chairman. Biogen went on to create one of the first treatments for hepatitis C and the vaccine given for hepatitis B before becoming a dominant player in treating multiple sclerosis. Yes, Biogen had evolved into a directionless bureaucracy, but Scangos had a hunch that the soul of those early days was still in there, somewhere. “This isn’t a job offer. It’s an intelligence test,” one industry friend told him. “If you get offered that job, you take it, period.”  He did, even though it meant leaving Exelixis, the company he had run for 14 years, and that he would see his wife, a professor at UC San Francisco, only on weekends after a 3,000-mile slog from Biogen headquarters in Cambridge, Mass. So far the move has proved to be the right one–for him and for Biogen investors. His two years at Biogen have been a textbook turnaround. He’s cut costs, and jobs, and redirected money into smarter marketing and leaner research and development. Out: hypercompetitive areas like cancer research. In: less trammeled ground like neuroscience and hemophilia. Since he took over, trailing 12-month sales are up 19% to $5.4 billion and net income 27% to $1.4 billion, and the share price has increased 212%, adding $34 billion in market capitalization. Icahn, ironically, missed out some. He sold his shares in spring 2011.  “What George did is cut out the fat and focused the company on core programs that would drive value,” says Robyn Karnauskas at Deutsche Bank. “He gets credit that the company is able to focus on selling them and doing the right studies. Before that it was all over the place.” He has also caught a break: The most potent fuel for Biogen’s stock surge comes from the success in clinical studies of a new multiple sclerosis pill, BG-12, which Wall Street analysts unanimously expect to dominate the MS market in the future. The program was in full bloom before Scangos arrived.  So now that Scangos, through focus and luck, has stemmed the bleeding, a larger challenge lies ahead. With its eight-year-old $6 billion cancer drug, Avastin, Genentech earned a reputation for keeping its research edge while growing from sales of $3 billion to $13 billion, eventually getting bought by Roche and giving investors a 657% gain.  “We’re in a very similar place as to where Genentech was pre-Avastin,” says Scangos. “Avastin hit; they did a great job with it; and arguably they made a huge success out of a product that other companies wouldn’t have done as well with. That success gave them the rope and the time to build what is arguably the best company in biotech history. That’s where we are. We’re poised at that moment in time.”
After languishing in the shadow of Genentech for years, Biogen, with a new CEO, a promising new drug and a soaring share price, could be the next big thing in the drug business.