With Sharer at Helm, Amgen Has Assumed Aggressive Tack

During an earlier career as a naval officer, Amgen Inc. Chief Executive Kevin Sharer served on two nuclear attack submarines.

Today, Sharer is on the prowl again. But this time his sights are set on Amgen’s proposed $16-billion deal to buy Immunex Corp., a transaction that would be the biggest acquisition ever in the biotechnology industry.

Ambitiously pursuing targets--albeit targets that he covets, rather than those he hunted underwater--has been a hallmark of Sharer’s varied business career. Analysts say that since Sharer, 53, took over as Thousand Oaks-based Amgen’s chief executive in May 2000, he has turned a long-paternalistic company into a more aggressive, acquisition-minded organization.

During a telephone news conference Monday morning to discuss the Immunex deal, Sharer displayed his bravado and salesmanship. “This is a very exciting acquisition with very little downside,” he said. “How often do we get a chance to get a blockbuster drug with a long patent life?”

Sharer, a native of Clinton, Iowa, was educated at the Naval Academy as an aeronautical engineer, receiving his master’s degree in 1971. After graduating from Annapolis and serving in the Navy, he launched his corporate career.

That path took him from the McKinsey & Co. consulting firm to General Electric and then to MCI Communications, where he climbed to executive vice president. He told the Wall Street Journal in 1999 that he left MCI when “it became clear I was never going to be a candidate for the No. 1 or No. 2 job.”

Sharer spotted an eventual CEO opportunity at Amgen, which he joined in 1992 as president and chief operating officer. His much-sought promotion, though, didn’t come quickly. “There were lots of days when I wondered when it would happen,” Sharer told the Journal.

Eventually, though, he was named to succeed Gordon M. Binder to become the third CEO in Amgen’s history. In January, Sharer gained the additional title of chairman.

His effect on Amgen, long known around its Thousand Oaks headquarters for its collaborative approach and its employee benefits such as its Camp Amgen child-care center, was soon apparent.

“Since Sharer has come along, Amgen has new energy,” said Jim McCamant, editor at large of the Medical Technology Stock Letter in Berkeley. “He’s willing to take risks and make things happen.”

McCamant said he, like many other analysts, was surprised when Sharer was moved into top management at Amgen and ultimately replaced Binder, because of Sharer’s relative lack of a biotechnology background. Today, however, McCamant gives Sharer high grades for energizing Amgen.

Elise Wang, a biotechnology analyst for Salomon Smith Barney, lauded Sharer for recruiting executives from pharmaceutical giants such as Merck and GlaxoSmithKline for his top management team.

“He’s not afraid to delegate authority. He’s very effective at knowing who is the right person for certain tasks,” Wang said.

Not all of the analysts who follow Amgen, however, are so sure Sharer is taking it down the right path. Fariba Ghodsian, managing director and head of health-care research for Roth Capital Partners investment firm in Los Angeles, agrees with McCamant that Sharer is ambitious. But she questions whether he is moving too aggressively for the company’s good.

“Kevin is much more pro-acquisitions, as opposed to Binder, who was building the company from the inside. Sharer is bringing in technology and acquisitions from the outside. But was this the best time for a merger of this magnitude?” Ghodsian said.

She said the company probably would be better off focusing on two drugs that recently received federal approval, Aranesp for anemia and Kineret for rheumatoid arthritis. Ghodsian also questioned whether Amgen is overpaying to acquire Immunex’s top product, Enbrel, which is used to treat rheumatoid arthritis.

“In the long term, Enbrel will have to compete in a market that is becoming very crowded, competing against new drugs that have a lower frequency of dosage,” Ghodsian said.

Sharer has extensive connections in the business world. In May, he reportedly hosted a meeting of business heavyweights, including Enron Corp.’s Kenneth Lay and ‘80s junk bond king Michael Milken. The session was intended to push for continued deregulation of California’s electricity market. Sharer declined to be interviewed for this story.

Sharer also is chairman of the board of the Los Angeles County Museum of Natural History and serves on the boards of 3M, Unocal and the U.S. Naval Academy Foundation. Records show that he personally has contributed to a variety of political campaigns, including the 2000 presidential campaigns of George W. Bush, John McCain and Bill Bradley.

Last year, he also donated $2million to the Naval Academy to endow a professorial chair in aerospace engineering.

According to Amgen’s most recent proxy statement, Sharer earned a salary, bonus and other compensation totaling $2.25million in 2000. The proxy also showed that he received options for 1.45million shares of stock, which the company said would be worth as much as $86million if the securities appreciate at a 10% rate over the next seven years.