Stakes high but Amgen CEO’s a betting man
Kevin Sharer has a thing for maverick war heroes.
In his sunlit office in Thousand Oaks, a massive portrait of the often-flamboyant Gen. George Armstrong Custer hangs across from his desk. It complements one of English naval great Horatio Nelson, renowned for defying orders.
Sharer has a military background himself, gained as an engineer on fast-attack Navy nuclear submarines during the Cold War. These days, at troubled Amgen Inc., he’s emulating his risk-taking heroes more than ever.
The 59-year-old chief executive is betting Amgen’s future on a handful of potential blockbuster medications. If the drugs disappoint, the biggest biotechnology company by sales will be left with little to fuel growth.
As it is, the stock is near a two-year low. Congress is investigating after several recent studies raised safety questions about two of Amgen’s bestsellers, anemia drugs Epogen and Aranesp, which account for 60% of the company’s profit. The Securities and Exchange Commission has opened an informal inquiry into Amgen’s failure to tell investors that a drug trial was halted for safety reasons late last year. The company went public only after an industry newsletter disclosed the facts several months later.
And last week, Amgen’s chief financial officer, Richard Nanula, resigned unexpectedly.
“They need a home run -- not a double, not a triple,” says Mark Schoenebaum, a biotech analyst with Bear Stearns.
Sharer has weathered storms before at Amgen. Several years ago, he had a romantic relationship with a married Amgen vice president. Senior executives lobbied him to end the relationship, saying it was hurting morale, but he didn’t until the employee left the company in 2001.
Two years ago, Boeing Co. forced its chief executive, Harry C. Stonecipher, to resign after discovering that he had an affair with a female employee. An Amgen spokesman calls Sharer’s relationship “old news.”
For his part, Sharer, who received compensation of $24 million last year, says he prefers to talk about his professional life.
“I think the era of the celebrity CEO of a few years ago is over,” he says. “I’d rather people concentrate on Amgen.”
They are. As early as next year, the company is expected to release late-stage trial results for its highest-profile product launch ever: the osteoporosis pill denosumab. If the results are good, the drug is likely to get Food and Drug Administration approval by 2009, then quickly grab a healthy share of the $6-billion-a-year global market for osteoporosis treatments, which is sure to continue to expand.
Two earlier-stage products also could be big wins. One may help patients with a variety of diseases that diminish blood platelets, while the other is an oral cancer pill.
“We are certainly facing some unprecedented challenges right now,” Sharer says. But “we believe several of our pipeline products will be significant breakthroughs for patients and Amgen.”
After leaving the military, Sharer worked at consulting firm McKinsey & Co. and General Electric Co. in business development, and built a reputation as a strong leader.
At GE, he caught the attention of Jack Welch, the company’s legendary chief executive, who asked him to helm the jet engine division. Sharer refused, reportedly because the position wasn’t prominent enough.
Instead, he went to MCI Communications Corp., taking a potential heir-in-waiting spot as president of the telecom giant’s business markets division.
After six weeks, Sharer marched into the chairman’s office, proposed a restructuring of the entire sales organization and suggested that he lead the overhaul. Sharer so alienated his colleagues, two former co-workers say, that it became clear he would never get the top job.
Desperate to leave, Sharer called Welch. But Welch hadn’t forgiven him and told him to forget he ever worked at GE.
Sharer says he learned more from that period of his life than any other. He describes himself as more modest and patient today. Still, he doesn’t dispute what both supporters and critics refer to as his exacting and often mercurial image.
“It’s absolutely necessary to lead,” he says, “but you have to ensure that people throughout your organization feel you trust they can make decisions and get your support.”
In 1992, Sharer moved to Amgen from MCI after a recruiter cold-called to see if he might be interested in the chief operating officer spot. He took it. He became chief executive in 2000 and a year later became chairman of the board.
In the 14 years he’s been at Amgen, it has grown from a $1-billion company to a nearly $15-billion one.
Sharer says has no worries about the future. “The best is in front of us.”
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Biotech believer
Kevin Sharer
Title: Chairman and chief executive, Amgen Inc.
Age: 59
Education: United States Naval Academy
Career highlights: Management consultant, McKinsey & Co.; president of business markets division, MCI Communications Corp.
Personal: Divorced, two children. Lives in West Los Angeles.
