When Sarepta Therapeutics Inc. announced Douglas Ingram as president and chief executive officer, the general consensus was that the Cambridge, Mass.-based biotech company tapped the former Allergan president to execute a buyout, given Ingram’s past experiences at Allergan PLC and Chase Pharmaceuticals Corp.
Ingram was president of Allergan when it fought off a hostile takeover by Valeant Pharmaceuticals International Inc. and agreed to be acquired by Actavis PLC for $66 billion. He joined Chase in 2015 as chief executive, and in less than a year’s time guided the biopharmaceutical company through a phase-two trial of its Alzheimer’s drug and sold it to Allergan for $125 million upfront—additional regulatory and sales-related milestone payments could bring the deal to $1 billion.
According to an analyst report from healthcare-focused investment bank Leerink Partners LLC, the “appointment of Mr. Ingram … will likely increase takeover speculation among investors that could layer on some M&A premium to the company valuation.”
But Ingram said Sarepta is a long-term play. He told the Business Journal that he is moving to Boston.
“I fell in love with the technology, with the mission [and] with the idea that the company could play a role in helping children suffering from a devastating disease,” Ingram said.
Sarepta develops RNA-targeted therapeutics for the treatment of rare neuromuscular diseases that impair the functioning of muscles. It received Food and Drug Administration approval last year to treat Duchenne muscular dystrophy, a rare genetic disease that causes muscle deterioration and early death in young boys.
Sarepta trades at about $34.65 per share with a nearly $2 billion market cap.
Ingram, who replaced interim Chief Executive Edward Kaye, will receive a base annual salary of $650,000, according to Securities and Exchange Commission filings. He also received 335,000 shares of company stock and an option to buy up to 3.3 million shares at $34.65 a share. He will get up to 90% of his base salary as a bonus each year if he meets certain performance metrics set by the company’s board of directors.
Ingram could potentially own up to 7% of the company’s outstanding shares.
“I am a believer in the company. My goal is to build the company with the rest of the team at Sarepta,” said Ingram, adding that he gets involved in companies that he wants to “roll the dice with.”
FDA Concerns
Sarepta’s FDA-approved drug, which is designed to treat Duchenne muscular dystrophy, incited protracted debate in September when the agency’s medical staffers questioned the effectiveness of the drug, which was tested in a small clinical trial of 12 patients.
A key concern was whether the drug can sufficiently produce higher levels of protein dystrophin, which strengthens muscle fibers and protects them from injury as muscles contract and relax. Without dystrophin, muscle fibers degenerate, and movement becomes impossible.
The agency approved the drug despite an FDA advisory panel voting that it should not be approved.
Dr. Janet Woodcock, director of the center for drug evaluation and research—the agency division that approves drugs—said in a statement: “In rare diseases, new drug development is especially challenging due to the small numbers of people affected by each disease and the lack of medical understanding of many disorders … Failing to approve a drug that actually works in devastating diseases—these consequences are extreme.”
As a condition of the approval, Sarepta will have to conduct a two-year, randomized controlled trial to study the clinical benefit. If the trial fails, the FDA could move to withdraw approval.
Ingram’s Run
Ingram had a nearly 20-year stint at Allergan, ascending to president in 2013. His much shorter stint at Chase could yield similar returns for investors in the drug company—10 times or more if phase-three trials of Alzheimer’s drug CPC-201 pan out for new owner Allergan. n
