NEW YORK, Jan. 29 - Tony White's got his job cut out for him.
Slim pickings, high standards, and an intimidating personality will likely make it difficult for the Applera CEO to find a replacement for Craig Venter, who stepped down as Celera's president last week.
Even before the toner had dried on the press release announcing Venter's departure, industry insiders were speculating on a) why he really left; b) who would replace him, and c) whether Celera will suffer either in the interim or in the long term. As they stand on Tuesday, the answers are likely a) because he doesn't have the chops to bring a drug to market; b) there are four strong possibilities, and c) no and no.
It's been well reported that Celera's top choice for the top slot must have a pharma background. But is that enough? And if offered the job--which for many potential candidates would be one rung down the corporate ladder--would he or she take it? Would one leave a comfortable post at a well-established and profitable pharmaceutical company and move to Rockville, Md., to head a nascent drug company and work for a boss who is renowned in the industry for having some rough edges?
"There's a lot of people in the pharmaceutical sector [that may fit the bill at Celera], but the question is, Will they leave their current post to do something like [run Celera]?" said Douglas Lind, an analyst with Morgan Stanley.
Lind says he thinks "it's really going to be more of an entrepreneurial type of person" who will likely accept an offer from White. "[Celera] really needs a big-time pharma person with lots of credibility and a track record, but [the candidate will also require] that entrepreneurial spirit to take somewhat of a risk."
Like many of his colleagues, Lind believes that there is a "very finite list" of candidates who not only must hit the ground running, but who must also possess the temperament to mesh with a demanding boss, be willing to move to Rockville, Md.--big on genomics but anemic on pharma--and lead a company whose core staff has no real drug-development experience.
"It obviously would have to be a person with experience running a pharmaceutical company, but it should not be a run-of-the-mill pharma executive," offered Winton Gibbons, an analyst who covers Celera for William Blair & Co., in Chicago. "I would expect somebody who has pharmaceutical experience but who might not be in a mainstream form--say, a pharmaceutical person who spent some time in diagnostics."
Other analysts say the kind of person who Tony White will need is probably already employed. What's more, signing on as Celera's new president will likely be a step down the corporate ladder, a perception highlighted by the going rate to run the shop: Last summer Venter earned an annual salary of $403,632 and a total compensation package of $3.9 million, which includes cash, bonuses, and the potential value of stock options, according to filings with US Securities and Exchange Commission. This made him the 78th highest-paid executive out of 100 in a report published last July by The Washington Post cataloging executive compensation in the region.
By comparison, William Haseltine, the CEO of Human Genome Sciences, was No. 3 with an annual salary of $448,077 and a total package of $26.2 million; and David Mott, CEO of MedImmune, was ranked No. 5 and earned $531,630 per year with a total package of $26.3 million. On the other hand, John Holaday, president and CEO of Entremed, earned $380,000 per year and was worth $2.7 million in all. He was ranked No. 100.
Money aside, current CEOs or presidents likely run their own shops with only a board and stockholders to please. Celera's head will have White, and the rows between White and Venter, also known to have a bit of an ego, are legendary.
"Frankly, Tony White is not the easiest guy to get along with," said one analyst who covers Celera for a well-known financial firm. "Knowing you'll have him over your shoulder may cause some candidates to think twice."
But to analysts like Jeoffrey Meacham, who covers Celera for UBS Warburg, White's strong personality will not likely play a role in a candidate's decision to join, much less be a deal breaker.
"I don't see that as being much of an issue," said Meacham. "Going into the situation, a candidate would know the culture of Applera, and my guess is that they'd have had upper-management experience so will likely be used to" dealing with all kinds of leaders.
"If you are a business unit head at a major pharmaceutical company--or even the head of R&D--in one of these newly merged companies like GlaxoSmithKline or Aventis, it would seem to me that this would be very appealing," said Stephen Israel, managing director for biotechnology and pharmaceuticals at the executive recruitment firm Korn/Ferry International. "You have the critical mass of people and the cash"--$900 million in the bank as of last week--"to build something."
And while most industry players say that the gobs of VC cash showered on new biotech firms in recent years has created a surplus of jobs for a relatively small number of experienced executives, Israel believes Celera may be immune to those recruitment challenges.
"There's not enough people to go around," he said. "But [being president of Celera] stands out as an opportunity, and it should be compelling. Celera's problem will be one of selection, not of attraction."
The candidate queue
Though few insiders would go on the record when asked to pinpoint whom they think would be ideal to replace Venter, a number offered at least one name without hesitation.
One name that popped up more than once is Jerry Karabelas, former CEO of Novartis. "He's run big organizations, he's got vision, he understands basic science, and he understands drug development," said one industry insider. "He's perfect."
Another possible candidate who also surfaced on more than one occasion is Ed Fritzky, CEO of Immunex, which is about to be acquired by Amgen. He will be "a great way for Celera to go," said the analyst, who conceded that Fritzky may not leave his post if asked. "He's got a lot of options, and he has been very successful at the help of Immunex."
George Poste, currently CEO of Health Technology Networks, a healthcare consulting group based in Arizona, is a popular choice among scientists and executives alike. Poste, who has 29 drug and vaccine approvals under his belt, has been president as well as chief science office and chief technology officer at SmithKline Beecham. He also sits on the boards of Maxygen, Orchid BioScience, and Illumina.
Heino von Prondzynski, who heads Roche Diagnostics, was another possibility. Though his current post more closely resembles Kathy Ordoñez', the former CEO of Roche Molecular Systems who now runs Celera Diagnostics, "von Prondzynski is the logical choice for me," volunteered one analyst. Von Prondzynski too has the drug-development chops that White covets: He was head of vaccines at Chiron and was a general manager of pharmaceutical and diagnostics for Bayer, where he worked between 1986 to 1994.
Neither man was available for comment at press time.
The dozen industry officials and analysts interviewed for this article all managed to agree on one thing: White will have to act fast. Most stock pickers are giving the CEO between three and six months to hire someone. Otherwise, as Morgan Stanley's Lind said, "investors will get anxious. They've already lost confidence in [Celera's stock.] They really need this guy yesterday."
"This should be a very attractive role for someone who understands how to meet drug-development milestones, and who can continue to raise money and do the kinds of partnerships [Celera] needs to go forward, or make appropriate acquisitions," said Israel, the executive recruiter. "This is a terrific opportunity [for a] high-profile and proven senior pharma or biotech executive. This is a plum."