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Seagen picks Novartis, Flagship veteran Epstein as new CEO

Cancer drugmaker Seagen on Thursday appointed longtime Novartis executive David Epstein as its new CEO, ending a search that began when the company’s founder, Clay Siegall, resigned amid domestic abuse allegations.

Epstein will take over for Roger Dansey, Seagen’s chief medical officer and its interim chief since May. Dansey will become president of R&D while continuing to serve as CMO.

Epstein spent more than 25 years at Novartis, growing the Swiss pharmaceutical giant’s oncology business before becoming head of its pharma division in 2010. In 2017, Epstein joined Flagship Pioneering in a consulting role. He has spent the five years since helping advise Flagship’s new companies, including serving as chairman of Rubius Therapeutics, a once high-flying startup that’s struggled since going public.

Epstein also served on the boards of two publicly traded, Flagship-backed biotechs, Axcella Health and Evelo Biosciences, as well as other privately held startups. He stepped down from Flagship in October.

“David’s demonstrated ability to build and scale a global oncology business, his experience in both large multi-faceted organizations and small biotechnology startups, combined with deep oncology knowledge, provide the strategic and operational expertise needed to lead Seagen to the next level,” said Seagen chairman Felix Baker, in a statement.

At Seagen, Epstein will take the reins of an established drugmaker that’s currently at a crossroads.

Seagen pioneered a type of cancer medicine called antibody drug conjugates, which chemically link an antibody to a tumor-killing toxin. Since its 1998 founding as Seattle Genetics, the company has grown to become the Pacific Northwest’s largest biotech. The company employs more than 2,700 staff and holds a market capitalization of over $24 billion. It has brought four medicines to market since 2011.

Yet Seagen isn’t consistently profitable and faces questions about future growth. Sales forecasts for one of its top products, the breast cancer drug Tukysa, have been threatened by AstraZeneca and Daiichi Sankyo’s rival treatment Enhertu. The company recorded a net loss of nearly $675 million in 2021 and lost another $462 million over the first nine months of 2022.

The company’s stock price has also swung wildly in recent months. After the resignation of Siegall, who founded the company and ran it for 24 years, Seagen was reportedly the target of a potential buyout from Merck & Co. Shares climbed as high as $180 apiece over the summer on the rumored deal.

But an acquisition hasn’t materialized and shares closed at $135 on Wednesday. They fell another 7% early Thursday, as Epstein’s appointment suggested to some investors that a deal might not be forthcoming.

“We think this likely confirms that Seagen will remain a stand-alone entity,” wrote Raymond James analyst Dane Leone, in a note to clients Thursday.

Epstein, then, will be charged with growing Seagen’s sales and pipeline. A critical drug launch could be coming, as the company in July claimed success in a study testing its drug Padcev alongside Merck’s Keytruda in front-line bladder cancer. Seagen has filed for an accelerated approval and, though it’s unclear whether the Food and Drug Administration will agree, analysts expect a clearance could lead to significant sales.

“Epstein’s background is well suited to the company’s needs,” Leone wrote, adding that the hire is a “positive step toward determining the [company’s] long-term outlook.”