Own a pharmaceutical company? Biogen Idec's
When asked about the need for scientific training at the head, Scangos told Wall Street Journal, "It is absolutely important and I think the industry has gotten away from having scientists or clinicians at the head."
Scangos, a scientist and former professor Johns Hopkins University, is right about the move away from having scientists as CEOs of large pharmaceutical companies.
Johnson & Johnson
Source: Company websites.
Of the group, none have a M.D. and only Lilly's Lechleiter has a Ph.D. At the other extreme, Novartis' Jimenez came to Novartis via H.J. Heinz -- yep, the catsup people -- and Frazier's claim to fame was litigating the Vioxx claims.
As a fellow scientist with letters at the end of my name, I want to agree with Scangos -- slaving in the lab was worth something, right? -- but I'm not sure that pharma CEOs are really making day-to-day decisions about scientific matters. If a CEO is surrounded by competent scientists, then operational and managerial skills would seem to be a bigger factor in the success of the company. Warren Buffett even admits to not paying attention to the pipelines of the drug companies he invests in, figuring that buying excellent well-run companies is a good enough strategy.
At small biotech companies and probably even mid-sized ones like Biogen, decisions are probably a lot more scientific based. But pharma investors should care more about whether the CEO can increase gross margins and free cash flow than whether the training of the CEO included BIO101.
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The only mail Fool contributor Brian Orelli, gets addressed to Dr. Orelli is from his mom. He doesn't own shares of any company mentioned in this article. The Fool's disclosure policy has a doctorate in the history of documents.