Synageva Biopharma's former CEO reaps millions in severance package

Former Synageva's CEO Sanj K. Patel at NASDAQ stock exchange.

By Alfredo Santana

Sanj K. Patel, the former chief executive officer and president of Synageva Biopharma, a Massachussets company which developed an FDA approved drug to ease the breakdown of fats that cause liver and spleen damage, reported a severance deal in 2015 worth nearly $15 million, while he made $7,069,567 the previous year.

Synageva traded in the NASDAQ exchange before Alexion Pharmaceuticals Inc. purchased it  on May 6, 2015 for $8.4 billion. Previously, Synageva Biopharma merged with Trimeris in 2011 in an all-stock transaction.

Alexion Pharmaceutical’s corporate headquarters are located in New Haven, CT, but it also operates offices in Zurich, Switzerland.

Patel’s lavish earnings included a 2014 base salary of $631,176. However, stock and corporate awards accounting for $6,028,800 helped balloon his income. The company’s former board of directors kicked in the CEO’s additional benefits and those for its executive team, composed of four more members, after they reached production, sales and registration targets.

Attached to Patel’s benefits was a clause for “involuntary termination after a change in control”  valued at $14,571,756. Of those, $2,044,763 was cash, and $12,526,993 in stock.

In 2014, Patel unsuccessfully tried to get FDA approval to market Kanuma, its ballyhooed intravenous treatment for a disease called Lysosomal acid lipase deficiency (LALD). LALD is a progressive congenital condition caused by an enzyme that fails to break down bad cholesterol, and causes cirrhosis. The board of directors credited him with efforts to get the drug’s commercialization, although Kanuma did not get FDA’s approval until December 2015, seven months after Alexion announced the pharmaceutical megamerger. The drug is only available through medical prescription issued by specialists.

Synageva’s board of directors approved a similar layoff package for former vice president and CFO Carsten Boess. He made $5,186,498. While at work, Boess claimed $2,532,375, out of which only $374,920 were allocated as base salary.

Chief Operating Officer Robert Bazemore’s merger layoff landed him $4,674,200.  Before the Alexion purchase, his regular 2014 income summed $3,958,570. He received a $100,000 cash bonus, stock valued at $1,893,000 and awards for $1,796,500.

Chief Medical Officer and executive vice president Anthony G. Quinn grabbed $4,657,621 after Alexion’s change in control. Before that, his salary was $2,847,898. Glen Williams, vice president for global technical operations clinched $2,837,427. He had an income of $2,727,866, and his base salary accounted for $332,800.

Felix J. Baker, an immunologist who graduated from Standford University, was Synageva’s  board of directors chairman. He was the company’s CEO from 2004 to 2008, year when Patel, one of eight board members, was named president. The company had its corporate offices in Lexington, Mass.

The other board members were Stephen Biggar, Stephen Davis, Thomas R. Malley, Barry Quart,  Thomas J. Tisch and Peter Wirth.

In a 2014 filing with the SEC, Synageva reported it assembled its executive compensation packages after similar programs from competing pharmaceutical companies, to retain members for their experience and previous achievements in the marketing, management and medical research fields. 

“The board of directors is responsible for overseeing Synageva’s risk management processes,” the file said. “Management identifies risks in multiple areas, including compliance, financial, strategic, political and operational risk, and on a regular basis the board of directors reviews together with management.”

That year the board of directors held five meetings. The compensation committee met three times, and the nomination and governance committee once.   The executive team attended an annual stockholders’ meeting.

“In reviewing Synageva’s compensation programs, Synageva reviews whether compensation policies and practices create risks that are reasonable likely to have a material adverse effect on Synageva,” the file said.

After the deal, the news agency Reuters reported Alexion’s CEO David Hallal said he expected Kanuma sales will top $1 billion. Shares of Synageva Biopharma more than double to $215.74 each after the announcement of its acquisition.

Alexion paid 0.6581 of its shares for each Synageva share, plus $115 in cash. Before the deal, each Synageva share cost $95.87