Celgene Corp. (NASDAQ: CELG) had seen endless growth and a major stock acceleration in prior years. But that was then, and Wall Street only cares about the upside of the future. Celgene shares were trading lower on Friday despite an approval in Europe.
The driving force here is a key management retirement. The problem is that this retirement is just sort out of the blue and was after a rather short tenure.
Celgene announced that President and Chief Operating Officer Jacqualyn (“Jackie”) Fouse, Ph.D., has decided to retire from Celgene. The retirement comes with an effective date of June 30, 2017. The company signaled that she will continue to serve as president and COO until April 1, and through June 30, she will serve as a strategic advisor to the management team.
But this retirement is a total exit of the company. Celgene said that Fouse will not stand for reelection to Celgene’s board of directors at the upcoming annual meeting in June.
Here is where the move looks rather interesting. Fouse joined Celgene back in 2010 as chief financial officer. In 2014, she was appointed president of Celgene’s Hematology & Oncology franchise. Then in 2016 she was promoted to president and COO. That’s last year, and she is just 56 years old. How many people in their 50s really retire after a year as the head of the company?
This move is only about a year after the company named Mark Alles as chief executive officer and former chief Bob Hugin moved to chairman.
Scott Smith, will be promoted to president and COO, effective April 1, 2017. Smith joined Celgene in 2008 and successfully built and launched Celgene’s I&I franchise. Terrie Curran will be promoted to President, Global I&I, effective April 1, 2017. She joined Celgene in 2013 as the U.S. commercial head of the I&I franchise
Celgene also announced that the European Commission has approved Revlimid as monotherapy for the maintenance treatment of adult patients with newly diagnosed multiple myeloma who have undergone autologous stem cell transplantation. Celgene noted that Revlimid is the first and only licensed maintenance treatment available to these patients. The company showed that this is a rare but deadly disease. Roughly 39,000 people are diagnosed with multiple myeloma in Europe, and around 24,000 people die from the disease each year.
Celgene’s run from 2011 to 2015 was monumental, with its shares rising from under $25 all the way up to about $135. Since then the stock has mostly been stuck in a trading range of about $100 to $120.
Friday’s drop was down 1.6% to $117.50, and the consensus analyst price target for the stock is closer to $140. Sometimes there seems to be more than meets the eye in corporate press releases.