Celgene’s Deal Boss Golumbeski Made a Quiet Exit in April

Celgene has had a lot of stumbles in the last year. In the fall, it abandoned a Crohn’s disease drug that it acquired in 2014 for $710. Then it missed its earnings estimates and cut a billion dollars from its 2020 sales guidance, largely due to problems for Otezla, its drug for psoriasis, which is being beaten up in the marketplace by newer drugs.

In February, the U.S. Food and Drug Administration (FDA) turned down Celgenes’ application for ozanimod for multiple sclerosis because of insufficient data. Although probably only a delay, it nonetheless threw a wrench in the gears of the company’s projected earnings, since it was forecasting ozanimod sales of approximately $263 million in 2019. Annual sales of the drug are projected to hit $3.46 billion by 2024.

In early April, Scott Smith, the company’s chief operating officer, left the company. In a statement at the time, Celgene indicated the company’s chief executive officer, Mark Alles, would take over his responsibilities. “Celgene is modifying its executive team structure to enhance leadership focus on building Celgene for continued long-term success.” Alles also took over the “strategic leadership” of the company’s oncology unit, in addition to manufacturing, clinical development and regulatory functions.

What somehow escaped attention until this week was that the company’s head of business development, George Golumbeski, also left the company. His last day was April 16. He is now a member of the supervisory board of MorphoSys and describes himself as a “self-employed business consultant.” He is also a scientific advisor to KSQ Therapeutics, a startup operated by ex-Genzyme chief executive David Meeker. He is also a partner at ARCH Venture Partners.

Geoffrey Porgess, an analyst with Leerink Partners, wrote earlier this month that the shine is “clearly off” Celgene’s business development strategy. And it looks in many ways as if Alles is cleaning house, particularly in light of the company’s recent string of problems. Many of the “problems” are believed to be issues with decision making within the company’s leadership, rather than technical problems related to the drugs themselves. They have raised questions among investors and analysts on its executive competence in the long term.

Another example of problems at the company relate to a big price hike it made last year for its drugs Revlimid and Pomalyst. When it happened, a company spokesperson stated that the “pricing decisions reflect the benefits that our innovative therapies provide to patients, the healthcare system and society.” The company also stated that the value of the company’s drugs “continue to increase, supported by the growing clinical and real-world outcomes for patients in the approved indications.”

David Mitchell, president and founder of Patients for Affordable Drugs, accused the company of hiking prices to “plug the hole” caused by its pipeline problems.

The Trump administration, particularly in light of recent remarks about its intended efforts to deal with high drug prices, appeared to be at least somewhat focused on Revlimid. Alex Azar, secretary of the Department of Health and Human Services focused on Revlimid as an example of a company running up profits while patients have difficulties paying for them. Azar didn’t name Celgene, but described a 20 percent price jump over one year, which seemed to be describing Revlimid.

Despite the timing, it appears that Golumbeski had been planning the transition for almost two-and-a-half years, according to reports. And stayed on for almost a year-and-a-half longer. Reportedly his exit was amicable.