Gilead Deal Gives CV Therapeutics CEO $8.4 Million Payday Despite Lack of Profits
Gilead's $1.4 billion takeover of CV Therapeutics was a good deal for one man: CVT CEO Louis G. Lange, who picks up an $8.4 million change-of-control bonus in the pact, according to a CVT filing with the SEC.
It's a particularly good deal considering that CVT hasn't made a profit in any of the last three years, racked up only $18 million in product sales last year, and lost nearly $100 million while doing so.
Gilead may believe that its management can rescue CVT's star drug, Ranexa. Ranexa was approved in 2006 but spent years under a cloud as the FDA worried about safety data. Only in November of last year did CVT finally manage to convince the FDA that the drug was safe enough for first-line angina use. Gilead, presumably, believes that Ranexa can compete directly with the stents that have been so lucrative for Abbott Labs. Note that Lange had his eye on Gilead for some time. Here's a breakdown of Lange's payout:
- Total compensation in 2007: $5.6 million
- $1.4 million severance payment
- $1.7 million bonus payment
- $36,000 in health benefits
- $3.6 million in equity acceleration
- $1.7 million in "gross-up" payments for tax.
- Total deal payout = $8.4 million
- Source: SEC, numbers have been rounded.