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James Tobin: An Ultimatum Backfires


In Business This Week: HEADLINER

James Tobin: An Ultimatum Backfires

It was a classic boardroom standoff. On Dec. 11, say sources close to Biogen, CEO James Tobin presented directors with an ultimatum: Let him run the company without interference from Chairman James Vincent or he'd walk. On Dec. 22, the board returned its verdict: Au revoir.

Tobin couldn't be reached for comment. Vincent, who stepped down as CEO last year, confirms the timing of the meetings but says he agreed with Tobin not to discuss the reasons for his departure beyond saying they are "personal." Vincent also says that as chairman, he was doing what Tobin wanted. That's not how everyone sees it. Tobin, the former president of Baxter, left because "he didn't need the chairman looking over his shoulder," says Cowen analyst David Stone.

The fracas is unlikely to disrupt operations. The Cambridge (Mass.) company sells the top multiple sclerosis drug, Avonex, and its stock is up 120% this year. That makes Tobin a hot job prosPect. Already, Boston Scientific--four times larger than Biogen--is sniffing around. "We're eager to talk to him," says CFO Larry Best.EDITED BY KELLEY HOLLANDReturn to top

The Latest Worry: Daredevil CEOs

INVESTORS ADORE GUTSY CEOs who take big chances in business. But what about when they risk their necks on their own time? That's what Oracle's Larry Ellison did on Dec. 29 when he sailed during a storm that took the lives of at least four sailors. Days earlier, Virgin Group Chairman Richard Branson's attempt to circle the globe in a hotair balloon ended when his craft came down in the Pacific. Hewitt Associates consultant James Reda thinks boards should require CEOs to mellow out. "In the past, the concern has been over reckless behavior like alcoholism, but this is new," he says. "It seems to be out of control." But Sarah Teslik, executive director of the Council of Institutional Investors, says the quest for challenge is the right attitude for CEOs. "If they'll risk their lives hopscotching, I'll bet on the stock."EDITED BY KELLEY HOLLANDReturn to top

A Bright-Eyed and Bushy-Tailed Drug

THE NEWS HAS CEPHALON'S INVESTORS PERKING RIGHT UP. On Dec. 28, the West Chester (Pa.) drugmaker announced that the FDA had approved Provigil, its drug for narcolepsy, a disease that causes a sudden, overwhelming desire for sleep. That sent Cephalon stock up 12%. Provigil helps narcoleptics stay awake and may have fewer side effects than amphetamines. But drug industry watchers say that like Viagra, Provigil may wind up being prescribed for people who just want to feel better--and such uses have not been studied or approved yet.EDITED BY KELLEY HOLLANDReturn to top

California's Beer Blast

A BATTLE IS BREWING OVER SPORTS promotion that has the liquor industry fearing a crackdown like the one on tobacco. California's Alcoholic Beverage Control Dept. had obtained a court order stopping a Miller Brewing Super Bowl sweepstakes offering tickets to the game and other prizes on the grounds that it unduly pushed drinking. An appellate judge on Dec. 16 ruled the order was improper on procedural grounds. Undaunted, California will push ahead with a rule to ban all such sweepstakes.EDITED BY KELLEY HOLLANDReturn to top


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