AbbVie shares slumped on Wednesday after the company announced that Chairman and Vice Chairman Michael Severino will depart at the end of May.
Severino turns to Flagship Pioneering, the biotech creator behind big names like modern (MRNA), and smaller players Denali Therapeutics (DNLI) and therapeutic beings (MRCB), to name a few. He will become CEO of Flagship and head one of its companies.
He is leaving AbbVie after eight years. In his role, he has been responsible for research and development, and the office of corporate strategy. Severino informed AbbVie of his plans on April 8, according to a Securities and Exchange Commission filing.
In today’s stock market, AbbVie shares fell 4.2% to 158.95.
AbbVie shares plunge after Severino’s departure
As CEO, Severino will help Flagship “create and develop breakthrough innovations in human health,” the company said in a press release.
Severino has worked in drug development for more than two decades. Before AbbVie, he worked at Amgen (AMGN) and Merck (MRK).
“I am delighted to take on this role and partner with the high-caliber team of world-class scientists, technologists and business executives assembled by Flagship Pioneering,” Severino said in a written statement. “I look forward to applying my experience in all phases of drug discovery, development and commercialization at Flagship to help make a meaningful difference for patients.”
During Severino’s tenure, AbbVie added Skyrizi and Rinvoq, two new immunologic drugs that could help stem an expected decline in revenue as Humira, the world’s best-selling drug, begins to face cheaper biosimilar rivals in the US. Humira’s biosimilars are likely to shake AbbVie’s shares.
AbbVie also won Food and Drug Administration approval last year for a migraine prevention pill known as Qulipta, a potential rival to biohaven pharmaceuticals(BHVN) Nurtec.
News of Severino’s departure also comes as AbbVie announces the 20th anniversary of Botox’s first FDA approval. At the time, it was approved as a cosmetic treatment for wrinkles. Now, it is also used to treat migraines, excessive sweating, and other conditions.
Stocks hit their stride this year
AbbVie shares have been on the upswing this year, rising nearly 30% to a record high of 175.91 on April 8.
Severino’s impending departure sent shares tumbling, but pharmaceutical shares still remain well above their 50- and 200-day moving averages.
On the bullish side, AbbVie shares also have a composite rating of 95. This puts the stock in the top 5% of all stocks in terms of fundamental and technical measures, according to IBD Digital. The relative strength rating of 96 means that AbbVie shares trade in the leading 4% in terms of 12-month performance.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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