Will lightening strike twice for Axovant?
Earlier this week, Axovant Sciences, a company that few people have probably heard of, announced that it was hiring the bio-pharma equivalent of a rock star as its new CEO. David Hung may not have the same name recognition of, say, Beyonce or Bono. But when it comes to turning small companies into big paydays, he seems to have the right experience.
At least that’s what Axovant shareholders appear to be hoping for, based on the fact that the company’s stock has surged nearly 30% since Hung’s appointment was announced on Monday. Trading volume, which was typically well below 500,000 shares, reached 7.5 million on Tuesday, before calming slightly to 1.6 million on Wednesday.
That’s because last September, Hung managed to sell his former company, Medivation, Inc. to Pfizer for around $14 billion. Hung, who had founded the company and served as its CEO, personally walked away with around $350 million, according to this FiercePharma report. After looking at Medivation’s filings, we came up with a slightly different number — just over $260 million. Whatever the number actually is — and this is one of the things that can be frustrating about post-merger filings since you never really get the final number once a company ceases to exist — it’s fair to say that it was a nice payday.
Will lightening strike twice? Judging by the way Hung’s employment agreement is structured, it certainly seems as if that’s the plan. Now, it’s probably fair to say that Hung doesn’t need the cash to cover daily living expenses, even if the agreement requires him to relocate to pricey New York City. That’s why his base salary was set at $550,000. But the real pay-off would come from the 6 million options he stands to receive, including 2 million that were priced at $15.13 a share, which was Friday’s closing price.
Also on Monday, the company announced that it was bringing on several members of Hung’s former Medivation team: Marion McCourt, who had served as COO at Medivation for the six months prior to the acquisition will have the same role at Axovant. And two former Medivation directors will also join Axovant’s board. McCourt received 465,000 options at Friday’s closing price and the two new directors — Kathryn E. Falberg and W. Anthony Vernon — will each receive 70,000 shares.