AbbVie, for only the second time in its history, has a new CEO. Having been led by Richard A. Gonzalez since its inception in 2013, the organization has named former president and chief operating officer Robert A. Michael as its new leader. As he takes on the role this month, the 31-year industry veteran inherits a company still weathering the loss of US exclusivity for its blockbuster Humira but that according to Gonzalez “is in a strong position for the long term.”

 

Preparing to Pass the Baton

AbbVie appointed Robert A. Michael as CEO and member of the board of directors in February, with Gonzalez retiring as CEO and becoming executive chairman of the board of directors. The announcement, which takes effect his month, wound up a process that had been going on for several years.

“The company has been planning for the eventual succession for a long time and has been thoughtful and deliberate to ensure the right plan was in place for a potential successor,” said Glenn Tilton, lead independent director of AbbVie’s board of directors at the time.

Identifying the right leader to take the reigns from Gonzalez was not an easy task. After an 11-year tenure that began with the creation of the company as a spinout from Abbott and saw AbbVie nearly triple its sales revenue, Gonzalez was a fundamental component to the company’s growth. “Under his [Gonzalez’s] stewardship, AbbVie has generated a total return to shareholders of more than 700 percent, created over USD 250 billion in market valuation, grown our annual patient base to more than 60 million people in 175 countries, invested over USD 60 billion in R&D and nearly tripled annual revenue,” affirmed Tilton.

Much of this growth was due to the blockbuster rheumatoid arthritis drug Humira, which recently faced the loss of US exclusivity. The former CEO had to stand by as nine biosimilars entered the market last year and US sales plunged by 35 percent. In 2023, speaking about the possibility of a leadership shift, Gonzalez said the company had to adjust to its loss of exclusivity first. “We need to completely get through the transition for Humira biosimilars here in the US.”

 

A Cautious Choice

Robert A. Michael is no disruptive firebrand recruited from the industry at large. AbbVie’s former president and chief operating, like Gonzalez, is a long-term AbbVie veteran who in its beginnings crossed over to the company from Abbott.

Having set up and led the newly created entity’s first financial planning organization as vice president, he has covered diverse areas from pharmaceuticals, aesthetics and diagnostics to diabetes care and nutrition and worked his way up the corporate ladder at AbbVie.

Taking on positions of increasing responsibility, including as vice chairman, finance and commercial operations, and chief financial officer, Michael has been a longstanding member of AbbVie’s Executive Leadership Team that appears to be set to preserve Gonzalez’s legacy. “I am committed to preserving our strong culture and delivering a remarkable impact for our patients, employees, shareholders and communities,” he said upon becoming CEO.

 

Overcoming the Patent Cliff

When the CEO change-over was announced Gonzalez said that “the business is performing very well and is in a strong position for the long term,” but AbbVie has not yet fully recovered from the biosimilar assault on Humira. Michael will be tasked with leading it through an earning slump in 2024 and although the Chicago-based pharma did deliver results that were better than expected in 2023, the company is expected to return to growth only in 2025.

AbbVie has made efforts to reduce its dependence on Humira, having launched autoimmune therapies Skyrizi and Rinvoq, which along with its blood cancer treatment Imbruvica had combined sales of USD 15.4 billion in 2023. The firm has also turned to M&A with bids last year for neurological specialist Cerevel Therapeutics for USD 8 billion and cancer drug developer ImmunoGen for USD 10.1 billion.

 

Photo credit: AbbVie