(Updates shares in 11th paragraph.)
Dec. 16 (Bloomberg) -- Kevin Sharer, who has run Amgen Inc., the world’s largest biotechnology company, for the past decade, will hand the reins to Robert Bradway, president and chief operating officer, in May.
Amgen grew under Sharer, 63, to an estimated $16 billion in annual sales from $3.6 billion in 2000. He also oversaw the debut in 2002 of Amgen’s current best selling drug, Neulasta, which is used to reduce infections in patients on chemotherapy, generating $3.56 billion in sales last year.
More recently, the Thousand Oaks, California-based company has sought to protect its former core anemia therapies, Aranesp and Epogen, from further declines and new challengers by locking buyers into long-term contracts. Amgen also has promised to return more cash to stockholders through declaring its first quarterly dividend this year and a $10 billion buyback program.
“Amgen has been run in a very shareholder friendly manner, they’ve been giving a lot of cash back to shareholders,” Eric Schmidt, an analyst with Cowen & Co. in New York, said in an interview. “I expect that it is going to be the case going forward as well.”
During Sharer’s tenure as the company’s third CEO, shares have gained an annual return of half of 1 percent, according to data compiled by Bloomberg. His predecessor, Gordon Binder, oversaw a 43 percent annual jump.
The drugmaker needs to focus more on finding partners and developing new products after turning out one blockbuster therapy in the past five years, denosumab, approved last year as Prolia for women with osteoporosis, said Michael Yee, a San Francisco-based analyst with RBC Capital Markets.
“What I think Bob Bradway needs to do is shake up the culture at Amgen, to reinvigorate a focus of innovation for new products and a focus on cutting expenses,” Yee said in an interview. “This company has not had a successful history of business development.”
Bradway, 48, who joined Amgen five years ago as vice president of operations, was named chief financial officer in 2007 and president last year.
While investors shouldn’t expect too must disruption under Bradway, he could “shake things up a little,” said Chris Raymond of Robert W. Baird & Co. in a note to clients.
Although Amgen’s “cost cutting, accelerated share buyback and dividend initiation announced earlier this year did placate some investors, we think many expected more, including a more drastic restructuring or strategic move,” Raymond wrote. “Under new management, perhaps more avenues toward unlocking shareholder value can be explored.”
Amgen rose 2.4 percent to $60.05 at the close in New York. Shares have gained 9.4 percent this year. Yesterday’s closing price of $58.62 was 4.9 percent lower than on May 11, 2000, when Sharer took over as CEO.
The company earlier announced it would raise its dividend for the first-quarter of 2012 to 36 cents from 28 cents. Amgen began paying a quarterly dividend in September.
Sharer, who joined the company in 1992 as president and was promoted to his current role in May 2000, also became board chairman in January 2001, a post he will hold until the end of 2012, the company said yesterday in a statement.
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