Pharma taps new CEO just as it unveils a big tie-up with AstraZeneca

Only a month after making one set of senior-level management changes, Daiichi Sankyo has decided it’s the right time to change its CEO as well.

Sunao Manabe, currently the company’s president and chief operating officer, will succeed George Nakayama as CEO, effective June 17, the Japanese pharma said on Friday. Nakayama has been Daiichi’s CEO since 2010 and took on the additional role of chairman in April 2017, when Manabe became president.

Daiichi depicted the appointment as coming at "the appropriate time […] in order to achieve further growth of the company."

The news also comes on the heels of a gigantic deal with AstraZeneca potentially worth nearly $7 billion. The focus? Daiichi’s lead antibody drug conjugate (ADC) DS-8201, designed for HER2-positive cancers. As part of its new ambitions in oncology, Daiichi has identified ADCs—which link an antibody to chemo payloads—as an investment priority. Acute myeloid leukemia is another; the company has a large AML pipeline.

The expected CEO succession follows a pattern commonly seen in Japanese companies. Christophe Weber, for example, joined Takeda in April 2014 as COO and was handed the CEO baton in 2015 from Yasuchika Hasegawa, who also retained the chairman role at the time.

Daiichi is steering away from cardiovascular and metabolism toward oncology in an overhaul sketched out in its 2025 master plan. Toward that end, the company just unveiled top-level management changes last month. As of April 1, Glenn Gormley, M.D., Ph.D., who serves as Daiichi’s R&D head and U.S. subsidiary chief, will pass R&D leadership to Junichi Koga, Ph.D., currently head of Japan R&D. At the same time, Ken Keller, a marketing executive, will take the top U.S. job from Gormley to forge "even stronger collaboration between R&D and commercial efforts," Daiichi said in February.  

The AstraZeneca ADC deal furthers Daiichi's R&D and commercial ambitions both. In a phase 1, previously treated patients with HER2-positive cancers, including breast and gastric tumors, experienced an overall response rate of 50.6% on the Daiichi drug. In recently released preliminary phase1/2 data, U3-1402, Daiichi’s HER3-targeting ADC candidate, demonstrated a 42.9% response rate in 42 patients.

Manabe, in the company’s 2018 annual report, said the results from the two products showed that Daiichi’s ADC technology "is a proven platform applicable to other antibodies."

Daiichi’s revenue has been under pressure lately, as its top-selling drug, anti-hypertension therapy Benicar (olmesartan), declines rapidly. For fiscal year 2018 ending in March, Daiichi is guiding Benicar sales to plummet by a third year over year, to 100 billion Japanese yen ($900 million), dragging its annual revenue by 5%, to 910 billion yen.

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