Rick Gonzalez, longtime AbbVie CEO, to step down in July

20 Feb 2024
www.biopharmadive.com
Executive ChangeAcquisitionIPOBiosimilar
AbbVie CEO Richard Gonzalez, the only chief executive in the big drugmaker’s history, will retire on July 1, the company said Tuesday.
Gonzalez will be succeeded by current company president and Chief Operating Officer Robert Michael. Once the transition occurs, Gonzalez will become AbbVie’s executive chairman and Michael will join the board of directors, AbbVie said.
“As a key member of the executive leadership team, he has had a tremendous impact on AbbVie,” Gonzalez said of Michael, in a statement. “From establishing our financial planning organization, to the development of our diversified business strategy, to successfully navigating the end of exclusivity for Humira in the U.S., Rob has been integral to AbbVie’s impact since inception.”
The announcement comes weeks after Gonzalez, during a quarterly earnings call, sidestepped a question from analysts about the company’s succession plans. Though Gonzalez laid out a series of steps the company was putting in place, he didn’t indicate an imminent change was coming.
“I have nothing new to report today,” he said at the time.
Nonetheless, a change is coming just as AbbVie is writing a new chapter in its history. The company last year began facing biosimilar competition in the U.S. for its top-selling drug, Humira. While Humira is still among the world’s best-selling medicines, total sales fell by nearly one-third to $14.4 billion in 2023, dragging AbbVie’s revenue down by 6% to $54.3 billion.
Yet AbbVie executives believe the worst may be over, as sales from newer drugs like Skyrizi and Rinvoq help drive “high single digit” growth rates from 2024 through 2029, the company said in recently issued long-term guidance.
AbbVie became a standalone company in 2013, when it was spun out of Abbott Laboratories in a deal that was intended to help investors better value the medical device giant’s pharma business. To head the newly independent company, directors and executives lured Gonzalez from retirement, who had served in many roles in 30 years at Abbott.
AbbVie was long thought of as a takeout target in the years following the spinout. A deal never materialized, though, and Gonzalez has since spent years trying to diversify AbbVie’s drug portfolio, preparing for the day Humira would begin facing competition.
The company has used large deals to help soften the blow. It bought Pharmacyclics for $21 billion to get a portion of the revenue from the blood cancer drug Imbruvica, and later paid $63 billion for Botox maker Allergan. But not every deal worked out so well, among them, was the $5.8 billion buyout of startup Stemcentrx for a cancer drug that later failed in clinical trials.
AbbVie’s also been able to follow Humira with other autoimmune drugs that have steadily grown sales. Two of them, Skyrizi and Rinvoq, accounted for $11.7 billion of its 2023 revenue. Last year, Gonzalez told investors that those two would reach $21 billion in combined revenue in 2027.
Along the way, AbbVie’s stock has skyrocketed. Shares, which debuted at about $26 apiece when AbbVie debuted in January 2013, now trade at about $178. And Gonzalez is now one of the biopharmaceutical industry’s longest tenured executives. His 11-year run is currently the industry’s fifth-longest, according to BioPharma Dive data.
”The board and I have been planning for a seamless CEO succession for some time. Now is the opportune time to hand the CEO role over to Rob,” Gonzalez said. Mr. Gonzalez. ”The business is performing very well and is in a strong position for the long term.”
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