SAN FRANCISCO, Nov. 28 – Reaction to Incyte Genomics’ Monday announcement appointing a new CEO and president, a move that underscores Incyte's intent to move from a genomics database provider to a drug developer, has been positive but also “wait and see.”
In the move, co-founder Roy Whitfield, who was named chairman of Incyte’s board, was replaced as CEO by Paul Friedman, formerly the president of DuPont Pharmaceuticals Research Laboratories. Robert Stein, a former executive vice president of research and preclinical development at DuPont Pharmaceuticals, was named president and chief scientific officer.
Friedman and Stein had worked together at Merck prior to joining DuPont.
Industry analysts told GenomeWeb that the new executives had the experience to shape Incyte into a drug discovery company, but that only over the next several months as a business model emerged and strategic additions and changes occurred at Incyte would the true value of the appointments become apparent.
“Incyte has been looking to make a change in strategy, the industry has been evolving from content providers to drug developers,” explained Darren Mac, an analyst with Gruntal & Co. “These appointments are the most credible” move in that direction for Incyte, said Mac.
“Compare market cap for HGS and Millennium to Affymetrix and Incyte. It is an order of magnitude difference,” said Alan Auerbach, a senior research analyst at Wells Fargo Van Kasper. “Investors believe the real value is in the drugs. Incyte is in the business of creating value for stockholders. This move is clearly a positive for the company.”
But the analysts cautioned that the new executives had their work cut out for them.
“There are still holes to fill, including in chemistry, toxicology, regulatory, and medicinal chemistry,” said Mac. “I view [the appointments] as important first steps, encouraging, but there is still a lot of work needed.”
In addition to bringing in additional people and groups to fill drug development roles at Incyte, Mac also sees the possibility of growth through acquisition.
“I wouldn’t be surprised to see an acquisition like Celera with Axys,” Mac said.
The management change follows on the heels of a broad corporate restructuring at Incyte , of Palo Alto, Calif., which includes shuttering the firm's custom genomics program and laying off roughly 400 employees.
Incyte also announced that Friedman, Stein, and Julian Baker, a managing partner of Baker/Tisch Investments, have been elected to the company’s board of directors.