By Mitchell Young
Former Democratic Governor Ella Grasso famously made a home cooked meal for Miles Laboratories, [Bayer Pharmaceuticals] executives to woo them to West Haven.
Times and the people of Connecticut have changed.
Bayer would eventually leave, and a $60 million incentive package proposal by the Rell Administration was not enough to change their consolidation plans after a merger.
The fact that NOT ONE Connecticut politician stood up for the company after New York Senator Charles Schumer attacked them for wanting to charge for their antibiotic Cipro during the Anthrax scare, likely didn’t help much either. A side fact, Bayer had just lost 1/2 billion dollars when the FDA pulled a previously approved Statin drug from the market
When Alexion Pharmaceuticals announced a 7% reduction in its 3,000-employee global workforce in early March, Republican leaders, Senator and Co-President Pro Tem, Len Fasano, and House Minority Leader Themis Klarides took it as an opportunity to pounce on the Malloy administration and its controversial “Fast Five” program but they also showed they were very willing to scuff up Alexion in the process.
But hey, when you want to be Governor…
Alexion's meager restructuring jobs announcement came days before the appointment of a new CEO and at a tumultuous time for a company that has advanced slowly and mostly quietly for nearly its full 25-year history.
There was that one time, when the company born in Science Park was not feeling the love in New Haven, and needed to expand. A peeved Leonard Bell co-founder and CEO eventually moved the company to a sprawling corporate park in Cheshire and the company thrived there for years.
The tumult, is the well reported “investigation” of how the public company was accounting for some revenues. How sales are booked is a big deal in public companies these days and the company’s board lost confidence in the CEO and CFO and they were quickly gone. In the end, the kerfuffle didn’t amount to much.
No re-statement of earnings and the stock quickly rebounded, with a new CEO, the 25-year mark, a sterling world class headquarters delivered to “his” town, Bell announced his retirement as Chairman of the company.
A few weeks later Alexion announced record earnings and surprising revenue growth. The company’s stock started heading back up with a $6 billion gain in value in two weeks.
On May 8th police in Brazil raided the offices of Alexion, amid a claim that the company was being illegally aggressive in getting approvals for their flagship and very expensive drug Soliris. The raid brought out the investment naysayers, short-sellers and the stock dropped like a rock.
Brand spanking new CEO Ludwig Hansen, shook things up even more with the company’s announcement that four of the most senior executives would be leaving the company, two immediately. Some on Wall Street were really thrown that one of those executives, a former Honeywell CFO, appointed as CFO just a few months earlier was also leaving at the end of the summer.
The “this must be really bad” naysayers and investors that sell a stock short started their field day and “shorts” media campaign against the company and its stock. The Brazilian raid was lucky timing for a Bloomberg Business report on Alexion’s overall “aggressive” sales practices and now we had a home run for the company’s critics.
And for the record, the corporatist, poorly informed and sophomoric PR department probably didn’t help Alexion.
By example one of their folks an “external community relations” something or other, a millennial, un-Linkedin me when they didn’t like questioning on why they were steering re-locating employees away from New Haven realtors and even certain neighborhoods.
But hey, I thought the Social Media “body slam” was really great, I have 2,400 other links, it helps to have your “give a sh..ttr broken.”
Don’t get me wrong, in challenging this new negative Alexion narrative, while I admire what the company has accomplished and the miracle they have provided to people with a rare disease, I can’t say the $30 billion market cap and the move to the new headquarters hasn't gone to their heads.
I’ve worked hard to keep those views out of our stories on the company, maybe others could not.
The New Haven Register rolled out a retired college professor to question whether the company could even survive, and what it meant to the state and the Hartford Business Journal, regurgitated that story and a few other negative ones for good measure.
The CT Post featured a column written by John Stoher, a Yale lecturer and columnist for a host of national publications, ostensibly also questioning Connecticut’s Fast Five program, but in fact, it was masquerading as another attack on Alexion.
Stoher ends his column saying, “by the way, one of Alexion’s drugs is called Soliris. It helps people with a rare blood disorder. It costs $18,000 per treatment. I don’t know if Alexion will survive. I do know I don’t want to help it gouge sick people.”
if you want to understand the attitude that is shared by far too many in Connecticut and that is driving major corporations out of Connecticut, read Stoher’s full piece. It’s not an analysis you’ll find on business incentives and certainly not on a leading bio-tech in major high profile media in Boston, that I guarantee.
And Yes, Connecticut NPR Executive Editor, John Dankosky, since YOU asked the question – when there are many tens of thousands of jobs of Connecticut citizens on the line, effective governments DON’T typically force marginally important, feel good legislation, down the throats of the companies that provide them.
And Yes, Senator Blumenthal, while we can appreciate and even honor, the consistency of your values, did you not get, that when you came out against the Aetna merger you would virtually guarantee that the company headquarters at least, would exit?
Couldn't you just have let Al Franken do that?
And while I’m on it, Connecticut news media has had no problem reporting on the $18 million salary of Aetna CEO Mark T. Bertolini, helping to fuel vicious social media commentary on the executive, blaming his salary for high health care premiums.
That Bertolini’s salary accounts for 7 cents per month, per “member”, doesn’t seem to make its way into local commentary or news reports.
Also, mostly missed, is that Bertolini is among the most liberal major company CEOs in the US and not liked by his cohorts for it. Bertolini has lobbied numerous major companies to support a $16 minimum wage at their companies and has some wins.
I will leave it to the Supreme Court as to whether organizations are people, but I sure know that they are run by them.
Is Alexion atypically aggressive as reported by Bloomberg and critics in trying to get insurers and governments to pay for the patients or as a rare disease company do they simply have to market a far different way?
Let’s face it most governments and insurers, and in truth probably most of us, don’t really want to the cover the great costs to provide tiny segments of the population with lifesaving cures.
But would you think it was aggressive if they were pushing really hard for insurer and government payments for a breast cancer drug?
Soliris is expensive, really, really expensive, but because of Alexion’s success it is now fielding other drugs, for other very rare diseases that cost billions to develop. Diseases and treatments that you and I can’t understand, but the people that benefit, they can.
So, what do you really believe about the value of their lives?
Beyond that moral argument, is Alexion really more aggressive than other drug companies or just different?
Have you missed the millions of dollars of commercials that fund Fox, MSNBC, CNN and virtually all of cable and do you realize that thousands of doctors, are as incensed by those commercials as the one cited by Bloomberg?
I know this first-hand, a physician friend went ballistic on me when I said that a drug commercial helped me query my doctor about a treatment, that was eventually agreed on.
Len, Themis, was Alexion a good deal for the state of Connecticut?
Well, you can count all the $20 plus billion dollar companies in the state, without getting to your toes, they made room for 1,800 employees, they have around 1,000 in New Haven, way above their promise.
Both of you and your colleagues signed off on $290 million for Jackson Labs, [ see, BIO-REVIEW: World Renowned Scientists Attracted To Farmington Research Center] its doing good, and well and maybe will do great someday. But you can’t have a new economy and pharmaceutical companies and bio-science companies in your state if you attack them.
More important, Connecticut’s, UConn’s and Yale’s decades long effort to develop a bio-science industry, like bioscience companies themselves is far more likely to fail than succeed.
In an informative and inspiring keynote address presented by Gerald Chan, a major bioscience investor and co-founder of Morningstar, the $3 billion dollar plus, global investment research company, at the 2017 Yale Innovation Summit pretty much said as much. He explained, the need for critical mass to achieve that success and to my reading at least, I didn’t see him as a believer, Yale and Connecticut could actually succeed.
He also questioned politely, Connecticut government’s approach to business in general.
Connecticut’s infantile approach to big companies from government, the media and YES, the public, has helped drive, Bayer, Pfizer, GE and likely Aetna next from the state.
For our part our coverage doesn’t shy away from the actual challenges Alexion is facing to continue to grow and stay independent, but fail because of drug cost hysteria, not happening.
[Alexion: As A New Year Begins – The Future Is Suddenly Uncertain, Alexion: The News is Very Good But Not Completely Good, Alexion: Blame It On Brazil or Kanuma -The Stock Dives, And The Movers Get Calls].
Will Alexion be sold at some point, maybe yes, will it fail?
Here’s how that argument lines up, we’ve got a big time magazine, a columnist, a few reporters, some skeptical politicians, the I don’t trust big company crowd, the pharma is evil group, a retired business professor saying yes or maybe, investment columnists that disclose they are making financial investments to drive down the company’s stock, all pitching failure.
On the other hand, all eighteen investment analysts that research the company, have it as a buy, expecting gains from 30% to 70%.
Make some money, buy their stock, before the second quarter results come in. [ I would if I had the dough ].
Years ago, a psychologist told a couple I know, that they wouldn’t change their destructive behavior, he said “they weren’t suffering enough.” Well Nutty Meggers, are you suffering enough to change yet?
If so, Mr. Fasano, Ms. Klarides, Mr. Looney, Mr. Aresimowicz and Mr. Malloy, get together, call up Sally’s Pizza, ask for a private lunch seating and invite Mr. Hansen and Mr. Goff, his new right hand man.
Put aside your bullshit, listen, learn, ask for help, channel Ms. Grasso, and remember, we’re all people first.