→ Jamie Macdonald will retire as CEO of Parexel on May 15, and the clinical research organization has already named Peyton Howell — the current chief operating and growth officer — as his successor. Macdonald replaced co-founder and longtime chief executive Josef von Rickenbach in March 2018, and Howell arrived two months later as chief commercial and strategy officer. Earlier, she handled a series of roles for more than a decade at AmerisourceBergen.

“Jamie guided Parexel through a pivotal time in the company’s evolution, leading it through its successful acquisition by EQT and Goldman Sachs Asset Management in 2021 and achieving industry-leading profit growth across his tenure with the company — outpacing the top-tier CROs during this same period to position Parexel for sustainable growth,” board chair Sheri McCoy said in a statement.

Macdonald will keep his board seat at Parexel until the end of this year.

Matt Britz

→ Chaired by Simone Song, who just announced a $260 million second fund at ORI Capital a month ago, AffyImmune Therapeutics has promoted Matt Britz to CEO. Britz joined AffyImmune as SVP of business development from Minerva Biotechnologies in 2021, and he was quickly elevated to COO. In addition to the new boss, AffyImmune has welcomed bluebird bio alum Pete Gelinas as SVP of CMC. For the past two years, Gelinas led manufacturing and technical operations at David Hallal’s ElevateBio. Song’s crew at ORI forked over $30 million for AffyImmune’s “Series A+” in October 2021, and we’ll see if the CAR-T developer has another fundraising round on the horizon.

Christine Roth

→ Bayer told Nicole DeFeudis this week that it’s “basically halving” the number of execs on its pharmaceutical leadership team as part of the massive restructuring project that’s taking place at the German multinational. It means the end of the road for Anne-Grethe Mortensen, a longtime Bayer staffer who has been chief marketing officer since 2019, but she’s the only one who will part ways. Sebastian Guth, who has been doing double duty as president of Bayer US and president of North America pharmaceuticals, will be COO on April 1 and stay in the US. The head of the oncology strategic business unit, Christine Roth, will lead a new “global commercialization” team on June 1. Meanwhile, R&D chief Christian Rommel and product supply leader Holger Weintritt aren’t going anywhere and neither is CMO Michael Devoy, but Devoy won’t be on the pharma leadership roster.

Annemarie Hanekamp

→ Annemarie Hanekamp will replace Sean Marett as BioNTech’s chief commercial officer on July 1. Hanekamp led the radioligand therapy teams at Novartis, which got a jump on an increasingly buzzy field with the approvals of Lutathera (from the Advanced Accelerator Applications buyout) and Pluvicto. Before that, she had numerous roles in 11 years at Bristol Myers Squibb, culminating in her promotion to head of sales, US immunology. BioNTech makes this leadership move as Covid-19 revenue continues its downward slide and as the German company touts an oncology pipeline that contains ADCs and bispecifics.

Noah Berkowitz

→ Several weeks after CFO Sean Cassidy’s departure, Arvinas has made another C-suite change by bringing in Noah Berkowitz as CMO. From 2020-23, Berkowitz was Bristol Myers’ development unit head, hematology, and he also tackled the role of clinical development head for hematology during his tenure at Novartis. Ron Peck, a Bristol Myers vet in his own right who had been medical chief since 2019, is stepping down from the protein degradation player “to pursue other opportunities.”

→ Fulcrum Therapeutics has enlisted Patrick Horn as CMO, while interim medical chief Iain Fraser will become SVP of early development. We last saw Horn in this space when he was named CMO of HemoShear Therapeutics, and he’s held the same position with Tetraphase and Albireo Pharma. Ex-Fulcrum CMO Santiago Arroyo left after five months to take the role of development chief at Bicycle Therapeutics in April 2023. Four months later, the FDA lifted the clinical hold on Fulcrum’s sickle cell therapy FTX-6058.

Simon Cooper

→ Morphic Therapeutic also has a new medical chief: Simon Cooper spent more than two and a half years with Keros Therapeutics in the same capacity, and he’s also been CMO at Kadmon and Anokion. Cooper has an extensive Big Pharma background with Roche, Novartis and Sanofi, and he was an asset strategy leader for risankizumab (known as the blockbuster Skyrizi) at AbbVie. Last September, Morphic’s stock took a tumble when its inflammatory bowel disease drug MORF-057 did not surpass Takeda’s Entyvio in terms of efficacy.

→ Eye drug developer Clearside Biomedical has picked up Victor Chong as CMO. Chong joins the team in Georgia from J&J Innovative Medicine, where he was VP, global head of retina DAS. Before that, he was global head of medicine, retinal health at Boehringer Ingelheim.

→ Elsewhere, at Ocugen, the company has promoted Huma Qamar to the role of CMO. Qamar has been with the company for over three years. Prior to her role at Ocugen, Qamar was with FSD Pharma as SVP, head of R&D.

Petra Kaufmann

→ Vigil Neuroscience concludes our tour through the latest CMO hires with the exit of Christopher Silber after just five months with the company. In walks Petra Kaufmann, the former CMO of AAV gene therapy biotech Affinia Therapeutics. Kaufmann is also the former SVP, clinical development, translational medicine & analytics for Novartis Gene Therapies. The FDA lifted a partial clinical hold on Vigil’s lead program, a TREM2 antibody now called iluzanebart, almost exactly a year ago.

→ Michael Boretti has taken the CBO job at Solu Therapeutics, the Longwood upstart that’s now run by ex-Faze Medicines CEO Phil Vickers. Boretti previously held the CBO post at Celsius Therapeutics since 2019 and he’s the ex-VP of business development for Epizyme. Santé Ventures, DCVC Bio and the venture arm of Astellas are among the investors that joined Longwood for Solu’s $31 million seed round last summer.

Dan Neil

→ BenevolentAI says that chief technology officer Dan Neil will be ending his seven-year run at the company in April “to relocate to be nearer his family.” James Malone will succeed Neil. He just finished a year-long stint with Logically.ai as VP of engineering; earlier, Malone was BenchSci’s VP, data engineering, machine learning and bioinformatics.

→ Larry Hineline is retiring after 22 years as CFO of Caplyta maker Intra-Cellular Therapies, which has also elevated Michael Halstead to president. Halstead has spent the last decade as Intra-Cellular’s general counsel and was elevated to EVP in 2019.

Jonathan Gillis

→ Through its acquisition of Karuna Therapeutics, Bristol Myers has a Sept. 26 decision date for the schizophrenia drug KarXT. Another contender in this space comes from MapLight Therapeutics, which has selected Vishwas Setia as CFO and shifted his predecessor, Jonathan Gillis, to chief administrative and accounting officer. Setia worked at Bank of America Securities for nearly a decade and served as a managing director in the healthcare investment banking group. MapLight secured a $225 million Series C last October and while ML-007C-MA is a muscarinic 1 and muscarinic 4 agonist like KarXT, the difference is it’s in combination with a peripheral muscarinic antagonist.

→ Syndax Pharmaceuticals, which closed a $230 million public offering in December, has named Steven Closter as CCO. Closter previously worked at Sunovion Pharmaceuticals, culminating in his role as VP, brand strategy and launch excellence. Before that, he spent nearly two decades at Forest Laboratories in senior marketing and commercial roles, including VP, marketing.

Tracey Lodie

→ Co-founded by scientific advisory board chair George Church and backed by Bayer, GRO Biosciences has welcomed Tracey Lodie as chief development officer. Lodie comes to GRObio from Quell Therapeutics, where he had been CSO since the summer of 2021. The 14-year Sanofi Genzyme vet also spent two years as Gamida Cell’s science chief and was SVP, translational immunology for BlueRock Therapeutics. In November 2021, GRObio raised $25 million in Series A financing to make protein therapies with artificial amino acids.

→ Lyon, France-based MaaT Pharma, which completed a new microbiome facility in France with Skyepharma last September, has enlisted Jonathan Chriqui as CBO. Chriqui has experience from Ipsen and Servier under his belt and formerly served as chief operating & chief business development officer at Somagenetix.

John Maraganore

→ John Maraganore inundated Peer Review with a barrage of board appointments and advisory gigs after he stepped down from Alnylam, but lately it’s been all quiet on the Maraganore front — until this week. He’s now on the board at Rapport Therapeutics, a neuro biotech that racked up two megarounds in short order last year and is chaired by ex-Karuna chief Steve Paul. Maraganore is also a venture partner at both Atlas Ventures and ARCH Venture Partners.

→ As BeiGene celebrates the long-awaited US approval of its PD-1 drug tislelizumab, which will be branded as Tevimbra, Checkpoint Therapeutics will resubmit a BLA for its PD-1 candidate cosibelimab after the FDA issued a CRL in December. Checkpoint has now elected Amit Sharma to the board of directors. Sharma, the VP of clinical development and therapeutic head for nephrology and hematology at AstraZeneca’s rare disease unit Alexion, was previously a medical affairs exec in Bayer’s cardiovascular and renal division.

→ Maggie Pax has sewn up a spot on the board of directors at Repligen. In the back half of her eight years with Thermo Fisher, Pax was VP, strategy and innovation.

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It is long past the time that we face the fact that “Social Security” is facing a retirement crisis. In June 2022, we touched on this issue, discussing the stark realities confronting Social Security.

“The program’s payouts have exceeded revenue since 2010, but the recent past is nowhere near as grim as the future. According to the latest annual report by Social Security’s trustees, the gap between promised benefits and future payroll tax revenue has reached a staggering $59.8 trillion. That gap is $6.8 trillion larger than it was just one year earlier. The biggest driver of that move wasn’t Covid-19, but rather a lowering of expected fertility over the coming decades.” – Stark Realities

Note the last sentence.

When President Roosevelt first enacted social security in 1935, the intention was to serve as a safety net for older adults. However, at that time, life expectancy was roughly 60 years. Therefore, the expectation was that participants would not be drawing on social security for very long on an actuarial basis. Furthermore, according to the Social Security Administration, roughly 42 workers contributed to the funding pool for each welfare recipient in 1940.

Of course, given that politicians like to use government coffers to buy votes, additional amendments were added to Social Security to expand participation in the program. This included adding domestic labor in 1950 and widows and orphans in 1956. They lowered the retirement age to 62 in 1961 and increased benefits in 1972. Then politicians added more beneficiaries, from disabled people to immigrants, farmers, railroad workers, firefighters, ministers, federal, state, and local government employees, etc.

While politicians and voters continued adding more beneficiaries to the welfare program, workers steadily declined. Today, there are barely 2-workers for each beneficiary. As noted by the Peter G. Peterson Foundation:

“Social Security has been a cornerstone of economic security for almost 90 years, but the program is on unsound footing. Social Security’s combined trust funds are projected to be depleted by 2035 — just 13 years from now. A major contributor to the unsustainability of the current Social Security program is that the number of workers contributing to the program is growing more slowly than the number of beneficiaries receiving monthly payments. In 1960, there were 5.1 workers per beneficiary; that ratio has dropped to 2.8 today.”

As we will discuss, the collision of demographics and math is coming to the welfare system.

A Massive Shortfall

The new Financial Report of the United States Government (February 2024) estimates that the financial position of Social Security and Medicare are underfunded by roughly $175 Trillion. Treasury Secretary Janet Yellin signed the report, but the chart below details the problem.

The obvious problem is that the welfare system’s liabilities massively outweigh taxpayers’ ability to fund it. To put this into context, as of Q4-2023, the GDP of the United States was just $22.6 trillion. In that same period, total federal revenues were roughly $4.8 trillion. In other words, if we applied 100% of all federal revenues to Social Security and Medicare, it would take 36.5 years to fill the gap. Of course, that is assuming that nothing changes.

However, therein lies the actuarial problem.

All pension plans, whether corporate or governmental, rely on certain assumptions to plan for future obligations. Corporate pensions, for example, rely on certain portfolio return assumptions to fund planned employee retirements. Most pension plans assume that portfolios will return 7% a year. However, a vast difference exists between “average returns” and “compound returns” as shown.

Social Security, Medicare, and corporate pension plans face a retirement crisis. A shortfall arises if contributions and returns don’t meet expectations or demand increases on the plans.

For example, given real-world return assumptions, pension funds SHOULD lower their return estimates to roughly 3-4% to potentially meet future obligations and maintain some solvency. However, they can’t make such reforms because “plan participants” won’t let them. Why? Because:

1. It would require a 30-40% increase in contributions by plan participants they can not afford.
2. Given many plan participants will retire LONG before 2060, there isn’t enough time to solve the issues and;
3. Any bear market will further impede the pension plan’s ability to meet future obligations without cutting future benefits.

Social Security and Medicare face the same intractable problem. While there is ample warning from the Trustees that there are funding shortfalls to the plans, politicians refuse to make the needed changes and instead keep adding more participants to the rolls.

However, all current actuarial forecasts depend on a steady and predictable pace of age and retirement. But that is not what is currently happening.

A Retirement Crisis In The Making

The single biggest threat that faces all pension plans is demographics. That single issue can not be fixed as it takes roughly 25 years to grow a taxpayer. So, even if we passed laws today that required all women of birthing age to have a minimum of 4 children over the next 5 years, we would not see any impact for nearly 30 years. However, the problem is running in reverse as fertility rates continue to decline.

Interestingly, researchers from the Center For Sexual Health at Indiana University put forth some hypotheses behind the decline in sexual activity:

• Less alcohol consumption (not spending time in bars/restaurants)
• More time on social media and playing video games
• Lower wages lead to lower rates of romantic relationships
• Non-heterosexual identities

The apparent problem with less sex and non-heterosexual identities is fewer births.

No matter how you calculate the numbers, the problem remains the same. Too many obligations and a demographic crisis. As noted by official OECD estimates, the aging of the population relative to the working-age population has already crossed the “point of no return.”

To compound that situation, there has been a surge in retirees significantly higher than estimates. As noted above, actuarial tables depend on an expected rate of retirees drawing from the system. If that number exceeds those estimates, a funding shortfall increases to provide the required benefits.

The decline in economic prosperity discussed previously is caused by excessive debt and declining income growth due to productivity increases. Furthermore, the shift from manufacturing to a service-based society will continue to lead to reduced taxable incomes.

This employment problem is critical.

By 2025, each married couple will pay Social Security retirement benefits for one retiree and their own family’s expenses. Therefore, taxes must rise, and other government services must be cut.

Back in 1966, each employee shouldered $555 of social benefits. Today, each employee has to support more than $18,000 in benefits. The trend is unsustainable unless wages or employment increases dramatically, and based on current trends, such seems unlikely.

The entire social support framework faces an inevitable conclusion where wishful thinking will not change that outcome. The question is whether elected leaders will make needed changes now or later when they are forced upon us.

For now, we continue to “Whistle past the graveyard” of a retirement crisis.

The post Retirement Crisis Faces Government And Corporate Pensions appeared first on RIA.

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