C-Suite Shake Up: How Paul Clancy Jumping Ship Affects Alexion, Biogen

Alexion Pharmaceuticals, Inc. ALXN announced Wednesday the appointment of Paul Clancy as its chief financial officer, effective July 31, though he is expected to join the company on July 10.

Previously, Clancy served as the CFO of biotech firm Biogen Inc BIIB for a decade.

Clancy's Appointment — Stock Positive

Commenting on the appointment, Credit Suisse said it expects the stock to trade up on the news, given that Clancy, being a biopharma veteran, is a strong hire. Predictably, Alexion stock has been up over 7 percent but Biogen is retreating by over 3 percent. Credit Suisse sees Clancy's departure from Biogen as a loss for the company's operations.

Analysts Alethia Young, Eliana Merle and Derek Yuan said they had always liked Clancy at Biogen. The analysts believe Clancy would add a lot of experience at a critical time in Alexion's operational history.

At a time when most of the management is new to Alexion, Credit Suisse believes the addition of a veteran biopharma CFO gives it a lot of credibility.

Sending A Positive Signal

Given its understanding the hiring diligence process wad robust from both sides, Credit Suisse thinks Clancy wouldn't have joined if there was something profoundly wrong at Alexion in commercial practices or financials.

"From looking at the 8k the initial term is 3 years, subject to automatic one-year extensions, with a very attractive financial package," the firm's Alethia Young said of the hiring terms (check out Young's track record).

Biogen To Move On

Meanwhile, Credit Suisse believes Biogen, which has begun a CFO search, would settle for an external candidate. The firm doesn't think the CFO transition would impact its deal making ability, given its deep bench.

Credit Suisse has an Outperform rating on the shares of Alexion and a $164 price target.

Stock Movements

• Alexion shares were up 7.55 percent at $116.15 Wednesday, but had fallen 1.27 percent in Thursday's pre-market to $116.50.
• Biogen shares were off 3.11 percent at $253.30 Wednesday and down 0.74 percent in Thursday's pre-market session at $251.50.

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