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Stock Analyst Update

Biogen's New CEO Faces Challenges Ahead

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Biogen's (BGEN) new CEO has his work cut out for him.

The Boston-based biotechnology firm announced Tuesday that president James Mullen would assume the position of chief executive officer on June 16.

The news came as no surprise. Biogen's current CEO, James Vincent, has made it clear for several months that he was grooming Mullen for the position.

Mullen will be taking the reins at Biogen at a challenging point in the company's history. There is concern that sales growth of Biogen's multiple sclerosis (MS) drug, Avonex, could be slowing. The firm has also encountered a number of problems in bringing its next generation of drugs through clinical trials. Most notably, Biogen abandoned all trials of immune-regulation drug Antova after several patients suffered blood clots.

Mullen's expertise--he helped launch Avonex in Europe--could prove critical. Avonex is locked in heated competition with Betaseron and Rebif for dominance of Europe's MS market. Increased sales in Europe could help bolster Biogen's topline growth.

There's no reason for great concern over the management shift. But Biogen investors will want to watch the company carefully in the coming months to see how Mullen approaches the firm's problems, especially building up its pipeline.

Emily Hall does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.