Savient's New CEO Johnson Tasked With Turning Krystexxa Into A Commercial Success

Eli Lilly's oncology head John Johnson has been named to the top post at Savient Pharmaceuticals as the company tries to rebound from a failed sales attempt.

After floundering for more than a year without a leader, Savient Pharmaceuticals Inc. has recruited a big-name executive with business development and commercial experience to helm the company as chief executive officer. Eli Lilly & Co.'s oncology president and former ImClone Systems Inc. CEO John Johnson will assume the CEO post at Savient effective Jan. 31, the company announced Jan. 25.

Having an experienced executive like Johnson on board will surely be welcome news to investors as Savient is in the midst of launching its first drug, the gout treatment Krystexxa (pegloticase), a pegylated uric acid enzyme approved by FDA in September (Also see "Krystexxa Cleared For Refractory Gout, Could Reach Patients By Year's End" - Pink Sheet, 15 Sep, 2010.).

Savient had never intended to commercialize Krystexxa on its own, and instead sought to sell the company after the approval. But that attempt failed, and the company has not recovered. Management announced plans to move ahead with the launch of Krystexxa after failing to find a buyer in October. The stock fell 45% the day of the announcement to close Oct. 25 at $12.07.

Thus, Johnson's first priority will be the launch of Krystexxa, but he will also need to define Savient's long-term strategy if the company is to remain independent. The New Jersey-based biotech has been without a CEO since late 2008 when its former chief Christopher Clement resigned via an "involuntary termination by the company without cause," according to a filing at the time. The day-to-day operations of the company have been handled by its president, Paul Hamelin, who will leave the company to pursue other interests after a transition period.

Johnson was not available for comment, but in a statement he said, "My focus will be on successfully launching Krystexxa globally in order to build value for all our stakeholders."

A New Dawn For Savient

Savient began shipping Krystexxa Nov. 30, but the full scale commercial launch will begin later in the first quarter, Hamelin said during a presentation at the JP Morgan Healthcare conference Jan. 11. Johnson's experience navigating the reimbursement environment in oncology will be useful as Krystexxa is an infused drug with a premium price for which it may be hard to win payer acceptance. The wholesale acquisition cost of the drug is $2,300 per 8 mg dose, and the drug is administered every two weeks.

Krystexxa is approved for patients with chronic gout refractory to conventional therapy. Savient believes it will be used initially in the most severe cases, estimated to be about 170,000 patients, or roughly 2% to 3% of the diagnosed gout population. The company has hired a team of about 60 to sell the drug, targeting 4,500 rheumatologists and 1,500 nephrologists initially, with plans to expand to general practitioners in a second phase, Hamelin said at JP Morgan.

Analysts have been skeptical about Savient's ability to pull off a successful launch for Krystexxa.

"While Savient is outsourcing additional expertise from Covance who will operate the reimbursement hotline and website, we believe more handholding may be required, and would rather see a team, which has more experience launching other challenging drugs," said Leerink Swann analyst Joseph Schwartz in an October research note.

Savient is also eyeing a European launch for Krystexxa. The company plans to submit a regulatory filing in the first quarter, with a potential launch planned in 2012.

For its part, Lilly said it plans to announce a successor to Johnson in the coming weeks. Lilly bought ImClone in November 2008 for $5.98 billion.

- Lisa LaMotta ([email protected])