The Motley Fool's readers have spoken, and I have heeded your cries. After months of pointing out CEO gaffes and faux pas, I've decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first and are generally deserving of praise from investors. For reference, here is last week's selection.
This week, I'm going to turn my attention to the biotechnology sector to highlight the truly exceptional CEO of Vertex Pharmaceuticals (NASDAQ:VRTX), Jeffrey Leiden.
Kudos to you, Mr. Leiden
Despite only manning the helm of Vertex for a year, Jeffrey Leiden has done a phenomenal job of guiding both Vertex's existing products and its pipeline. Vertex's biggest claim to fame is Incivek, a medication that's combined with interferon and ribavirin to treat hepatitis C. Sales of Incivek shot out of the gate like a rocket, completely leaving Merck's Victrelis in the dust.
However, revolutionary new forms of all-oral hepatitis-C treatments appear to be on the horizon from both Gilead Sciences (NASDAQ:GILD) and AbbVie (NYSE:ABBV). This week, Gilead tested its experimental hep-C drug, Sofosbuvir on patients with genotypes 2 & 3 that had failed prior therapies. Sofosbuvir, as it has in all previous late-stage trials, significantly outperformed the control arm, registering a cure rate of 76% after 13 weeks and 50% after 12 weeks. An approval appears all but a certainty. Similarly for AbbVie, its drug combination, when combined with a ribavirin, was nearly perfect in eliminating detectable levels of the hep-C virus in a 79-patient clinical trial.
While this should definitely be a concern that keeps Vertex from sitting on its hands, it's also not the end of the world, either. For one, there have been numerous failures of hep-C pipeline candidates. None may be more memorable than Bristol-Myers Squibb's (NYSE:BMY) BMS-986094, acquired from Inhibitex, which caused the death of a patient in trials and hospitalized numerous others. Research on the drug was eventually discontinued, and Bristol was forced to write down $1.8 billion of the value of its Inhibitex acquisition. Idenix Pharmaceuticals (UNKNOWN:IDIX.DL) hasn't fared much better with clinical holds being placed on two of its hepatitis-C pipeline candidates directly related to the cardiovascular concerns raised from BMS-986094's failure. This leads me to believe that while Incivek may begin to be phased out over time, it still has plenty of revenue-generating capacity left to come.
Vertex's remaining pipeline and FDA-approved treatments are nothing to sneeze at as well. Vertex is making solid strides in treating cystic fibrosis, with the approval of Kalydeco last year to treat those with the G551D mutation (about 4% of all cystic fibrosis patients), as well as ongoing trials of VX-809 in combination with Kalydeco. With so few cystic fibrosis treatments available, this could be another area where it claims significant market share.
Vertex isn't lying down and waiting for Incivek to become obsolete, either. Vertex is developing an all-oral hep-C therapy of its own, known as VX-222, that's being tested in combination with Incivek. Interim results released in July show that the combination could be an effective therapy for treating the most common genotype 1 hep-C patients in as few as 12 weeks and no more than 24 weeks.
A step above his peers
As you can see, Vertex is having no problem holding its own and introducing new and revolutionary therapies in multiple areas of focus. What often gets overlooked is that Jeffrey Leiden and Vertex do a phenomenal job of taking care of their employees and in giving back to their surrounding communities.
If you're looking for a fun and innovative job in the health-care industry, landing a job with Vertex will net you a minimum of four paid weeks of vacation from day one! In addition to the typical perks we see at most well-run companies (e.g., health and dental benefits), the company's Massachusetts locations offer on-site fitness centers. Companywide, Vertex offers quarterly health education seminars and offers on-site flu shots. Vertex also recognizes an outstanding employee each year with the Outstanding Research Award. The winner, which receives the award for "contributing to a solution of a critical scientific problem," receives a whopping $10,000.
Vertex maintains a key position as a philanthropist within its communities as well. In Boston, it has developed a partnership with two public schools to help support educational activities in advance placement courses. When its new corporate headquarters being built in Boston is complete, it'll allow students from these participating schools to conduct scientific projects alongside Vertex's lead scientists. Many of the company's employees also participate in community volunteer programs.
Two thumbs up
Vertex may be unprofitable at the moment, but it's making some very smart moves from the viewpoint of shareholders. Both its FDA-approved drugs, as well as its developing pipeline, make it a very attractive investment. CEO Jeffrey Leiden has played a good part in keeping Vertex's employees, improving its surrounding communities, and enriching the pockets of shareholders. For that, I give Mr. Leiden two emphatic thumbs up!
Do you have a CEO you'd like to nominate for this prestigious weekly honor? If so, head on over to the new CEO of the Week board and chime in with your fellow Fools on who deserves some praise. If you don't have a nominee yet, don't worry; you can still weigh in on other members' selections.