- After almost 16 years in the position
- Praise, thanks and good wishes for Higgins
- Todd Davis taking over
- Higgins said 96 words
(exechange) — San Diego, California, December 5, 2022 — John Higgins, chief executive of Ligand, leaves his position. As announced by Ligand Pharmaceuticals Inc. in a news release and in a regulatory filing published on Monday, December 5, 2022, John L. Higgins leaves his post as chief executive officer at the biopharmaceutical company, after almost 16 years in the role, effective immediately.
It is the end of an era.
The average tenure of CEOs who announced their departure over the past 12 months was 8.2 years. Around 13% of CEOs left their posts after more than 15 years. This is according to data collected by CEO-exit research firm exechange.
exechange tracks CEO departures at the 3,000 largest publicly traded companies in the U.S., examines the reasons CEOs leave and determines the Push‑out Score™, a measure of pressure on departing chief executives on a scale of 0 to 10.
John Higgins’s duties as CEO will be taken over by Todd C. Davis, currently Managing Partner at RoyaltyRx Capital.
Already a director
Davis has already been a member of the board of directors of Ligand. Generally speaking, most director-turned-CEO appointments occur following a sudden resignation of the outgoing CEO and signal a lack of preparedness on the company’s part to groom internal talent. Directors-turned-executives represent a blend of outsider and insider.
They don’t have the constraints of a pure insider when it comes to leading painful changes or making unpopular decisions, and they have more company knowledge than a pure outsider.
Having been a director, Davis understands the expectations and dynamics of the board and has knowledge of Ligand’s organization, risk-management practices and strategy.
“An opportune time”
Ligand did not give an explicit reason for John Higgins’s departure from the CEO post. John W. Kozarich, Ligand’s Chairman, said: “Importantly Todd’s extensive royalty experience makes this an opportune time for him to take the helm at Ligand.”
The three most common reasons given for CEO departures over the past 12 months are performance issues (24.8% of cases), implementation of a planned succession (17%) and the statement that the time was right for a change (8.7%), according to exechange data. Other reasons given for CEO departures included the outgoing CEO’s pursuit of other opportunities (6.5% of cases), personal reasons (3.4%) and conduct issues (2.5%). Rather rarely mentioned departure reasons are health problems (2.5% of cases), career change (2.2%), desire for more time with family (0.9%), disagreement (0.6%) and death (0.6%). Sometimes, more than one reason was given. In 30.3% of cases, no reason was given.
Precise information regarding John Higgins’s future plans was not immediately available.
“Retired”
Ligand said: “John Higgins has retired as Chief Executive Officer, effective as of today.”
Generally, retirements are seen as formally voluntary departures. Still, CEOs may also be pressured to accelerate their retirement plans. In fact, 31% of the time “retire” was used in the past 12 months, the CEO departure received a Push-out Score above the critical threshold of 5, indicating elevated pressure.
Share price decline since December 2017
The announcement follows a decline in Ligand Pharmaceuticals Inc.’s share price of 11% since December 2017.
In the position of CEO since 2007
John Higgins became CEO of the Company in 2007.
Higgins will resign as a director of the company on December 31, 2022.
John L. Higgins was the Company’s Chief Executive Officer, a position he held since January 2007, and he has been a member of the Company’s board of directors since March 2007.
Prior to joining the Company, Higgins served as Chief Financial Officer at Connetics Corporation, a specialty pharmaceutical company, since 1997, and also served as Executive Vice President, Finance and Administration and Corporate Development at Connetics until its acquisition by Stiefel Laboratories, Inc. in December 2006.
Before joining Connetics, he was a member of the executive management team at BioCryst Pharmaceuticals.
Prior to BioCryst, Higgins was a member of the healthcare banking team of Dillon, Read & Co. Inc., an investment banking firm.
Higgins serves on the board, audit committee and nominations & governance committee of Bio-Techne Corporation, a publicly-traded life sciences services.
Higgins has served as a director on numerous public and private companies. He also serves as the chairperson of the board of trustees of Academy of Whole Learning, a non-profit organization dedicated to providing educational and therapy services to children of underrepresented communities.
He graduated Magna Cum Laude from Colgate University with an A.B. in economics.
96 words by John Higgins
In the news release announcing his departure as CEO of Ligand Pharmaceuticals Inc., John Higgins received praise, thanks and good wishes.
John Higgins said 96 words in the official leadership-change announcement.
“The time is right to retire”
John Higgins stated: “I am very proud of Ligand’s transition from a fully integrated pharmaceutical company to a streamlined organization with strong cash flow, diversified royalty streams and economic rights to a large portfolio of medically important, late-stage programs. Ligand is in excellent hands under the leadership of both Todd and newly appointed President and Chief Operating Officer Matt Korenberg. With the spin-off of our OmniAb antibody-discovery business as an independent, publicly traded company now completed the time is right to retire while continuing to help make OmniAb a high-tech and growth-focused antibody company and drive significant shareholder value.”
Over the past 12 months, 26% of all outgoing CEOs remained silent in the departure announcement, according to data compiled by exechange. Departing CEOs who did make a statement said an average of 111 words. The longest statement was 382 words, and the shortest statement was 23 words. Statistically, management changes are associated with high pressure when outgoing CEOs provide conspicuously short, excessively long or no explanations of their move, according to exechange data. In contrast, leadership transitions are statistically associated with low pressure when departing CEOs speak more about their successors than their successes.
32% of CEOs are forced out or fired
When CEO departures are announced, exechange determines the Push-out Score on a scale of 0 to 10 to assess how likely it is that the chief executive was pushed out or felt pressure to leave the position.
Of the 323 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 5, 2021, to December 4, 2022), the average Push-out Score was 5.5, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When time with family, performance issues or personal reasons were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 32% of the CEO departure events from the past 12 months received Push-out Scores of 8 or higher.
In other words, in the past 12 months, three in 10 departing CEOs were forced out or fired.
Pressure in the health care sector well above critical threshold
Some industries are under generally higher pressure than others, and CEOs are feeling the strain. In the past 12 months, the communication, health care and consumer staples sectors showed the highest average Push-out Scores. By contrast, pressure on CEOs was lowest in the real estate, industrials and financials sectors, as measured by average Push-out Scores.
In the health care sector, which includes Ligand Pharmaceuticals Inc., the average Push-out Score over the past 12 months was 6.6, which is well above the critical threshold of 5.
In the health care sector, 21 exiting CEOs received Push-out Scores of 8 or higher over the past 12 months, indicating that they were forced out or faced extreme pressure to step down.
Push-out Score for John Higgins’s move determined
The Push-out Score regarding John Higgins’s move is explained point by point in the exechange report.
exechange reached out to Ligand and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 50.2022 ($).