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Ruth Porat, Alphabet’s outgoing finance chief, has spent a year and a half guiding the company through the generative AI boom. The person who was recently named her successor was immersed in a very different phenomenon: anti-obesity drugs.
Alphabet named Anat Ashkenazi, Chief Financial Officer of Eli Lilly, as its new CFO on Wednesday, following a nearly year-long search. During that time, Ashkenazi managed the books at the world’s most valuable pharmaceutical company, which has struggled to meet demand for weight loss treatments Mounjaro and Zepbound.
“Hundreds of thousands of people fill scripts for Mounjaro and Zepbound, but we understand the frustration of those experiencing prescription delays or uncertainty in receiving their medicine,” Ashkenazi said during Eli Lilly’s first-quarter earnings call in April.
The two drugs are part of a class of treatments known as GLP-1s, which have gained popularity in recent years due to their effectiveness in aiding weight loss. The medications, which also treat diabetes, work by mimicking a hormone produced in the gut that suppresses an individual’s appetite. According to a survey released last month by the health policy research organization KFF, approximately one in every eight adults in the United States has used a GLP-1.
Eli Lilly shares have risen by 90% in the last year and are now trading at a record high. In April, the company reported better-than-expected earnings and raised its full-year guidance.
“During her last three years as Lilly’s CFO, we have experienced tremendous growth and laid the groundwork to help us reach even more patients with our medicines,” Eli Lilly CEO David Ricks said in a press release on Wednesday.
Ashkenazi, who has spent the past 23 years at Eli Lilly, will relocate from the drugmaker’s headquarters in Indiana to the San Francisco Bay Area at the end of July, at an equally pivotal time for Google. The finance unit has been dealing with a restructuring that has affected the entire company, as Google prioritizes AI investments to keep up with a rapidly changing market.
After nine years at Morgan Stanley, Porat is now the president and chief investment officer at Alphabet. She and Ashkenazi will both report to CEO Sundar Pichai.
Alphabet did not respond to CNBC’s request for an interview with Ashkenazi.
Ashkenazi, 51, began her career in Israel’s financial services sector. She joined Eli Lilly in 2001 through a venture capital division that focuses on health-care technology.
Ashkenazi previously served as finance chief for global divisions such as manufacturing and research and development, as well as chief strategy officer, before becoming CFO in 2021. She took over the finance department after then-CFO John Smiley resigned amid allegations of an inappropriate relationship with an employee, forfeiting millions of dollars in bonus and equity awards.
After her promotion, Ashkenazi discovered a frustrating fact: she was the only female CFO in the biopharma industry. Her path had been relatively easy, she told CNBC in a 2022 interview, having moved to the United States from Israel over two decades before and coming from a very different culture where gender inequality was less prevalent. She was undeterred by being the only woman at the table.
“I could care less,” Ashkenazi replied. “But not everyone has that mindset, especially in the Midwest.”
Ashkenazi stated on the CFO Thought Leader podcast last year that she spent five years in various parts of the organization, seeing the business from various angles.
“That experience built my skillset in a more comprehensive way,” she stated.
Ashkenazi has a master’s degree in business administration from Tel Aviv University and a bachelor’s degree in economics and business administration from Hebrew University, according to public filings.
The fastest growth in decades.
Eli Lilly has been a major pharmaceutical company in the United States since its founding in 1876. It is best known for developing the antidepressants Prozac in the 1980s and Cymbalta about 20 years later.
However, Eli Lilly has experienced historic growth in recent years as a result of the exploding popularity of GLP-1s. Sales of the diabetes drug Mounjaro, which exceeded $5 billion in its first full year on the market, and the rapid launch of the newly approved weight loss injection Zepbound helped lift Eli Lilly’s revenue by 20% last year to $34 billion, the fastest growth since 1990, according to FactSet.
This success, combined with the potential of highly anticipated drugs such as Alzheimer’s treatment donanemab, increased Eli Lilly’s market capitalization to nearly $800 billion, making it the largest pharmaceutical company by market capitalization.
With demand for its weight loss and diabetes treatments exceeding supply, many patients are unable to obtain the medications. During an earnings call in February, Ashkenazi stated that the company had doubled production capacity for its incretin drugs by the end of 2023, thanks to one of its new facilities in North Carolina.
Eli Lilly also announced plans to invest $2.5 billion to open an injectable product manufacturing facility in Germany, as well as $1.6 billion to build two new production facilities in its home state of Indiana.
“Our manufacturing organization continues to execute well on the most ambitious expansion agenda in our company’s long history,” Ashkenazi stated during the conference call.
It is not the first time Ashkenazi has had to manage rapid production.
In 2020, the Trump administration announced a deal to buy Eli Lilly’s Covid-19 antibody treatment as part of the health department’s “Operation Warp Speed.” The following year, the United States Food and Drug Administration halted one of Lilly’s Covid-19 antibody treatments, bamlanivimab, determining that the therapy alone may not be effective against variants.
On the CFO podcast, Ashkenazi stated that Eli Lilly entered the Covid testing market to increase production at a time when it was desperately needed.
It is not the first time Ashkenazi has had to manage rapid production.
In 2020, the Trump administration announced a deal to buy Eli Lilly’s Covid-19 antibody treatment as part of the health department’s “Operation Warp Speed.” The following year, the United States Food and Drug Administration halted one of Lilly’s Covid-19 antibody treatments, bamlanivimab, determining that the therapy alone may not be effective against variants.
On the CFO podcast, Ashkenazi stated that Eli Lilly entered the Covid testing market to increase production at a time when it was desperately needed.
Ashkenazi has faced significant public pressure along the way. Last year, as whistleblowers and government groups criticized the high prices of new obesity medications that saved some people’s lives, Eli Lilly announced 70% price cuts for its most commonly prescribed insulins, as well as the expansion of a program that limits patient out-of-pocket insulin costs to $35 per month.
According to an Eli Lilly spokesperson, the $35 program was already in place through Medicare Part D before the announcement.
In April, a $13.5 million settlement between Eli Lilly and insulin drug purchasers was canceled after a judge refused to certify a class in the case.
Last year, Eli Lilly settled a whistleblower lawsuit filed by a former employee who claimed manufacturing issues and faulty practices involving diabetes drugs and insulin pricing. In 2021, the United States Department of Justice opened a criminal investigation into an Eli Lilly plant in New Jersey for alleged manufacturing practices and data falsification. According to Reuters, the FDA discovered additional deficiencies at the plant last year.
A different Google
Ashkenazi joins Alphabet with an equally large but very different set of challenges.
The company’s core advertising business is recovering after a difficult 2023, when businesses cut ad spending to cope with rising inflation and macroeconomic concerns.
Revenue increased 15% in the first quarter, marking the fastest growth since early 2022. The company declared its first dividend and initiated a $70 billion buyback program. The stock price is up 26% this year and is approaching an all-time high.
However, the company has been on the defensive for much of the past 18 months, following the late 2022 launch of OpenAI’s ChatGPT, which caught Google off guard and raised investor concerns that consumers may soon have new ways to find information online. Google responded with a series of generative AI product launches that were criticized for being rushed, and in some cases, the company was forced to backtrack due to errors.
Meanwhile, despite being one of the world’s largest companies, Alphabet remains a founder-controlled company, with Larry Page and Sergey Brin holding “over 51% of our company’s total voting power while owning less than 12% of stock,” according to the most recent proxy filing.
Ashkenazi also joins at a time of cultural change at a company known for high pay, lavish perks, and a vibrant culture in its early years. Employees have recently expressed frustration with the company’s ongoing cost cuts, despite record profits, and return-to-work mandates following the pandemic.
— CNBC’s Eric Rosenbaum and NBC researcher Toby Lyles contributed to this story.
Correction: An earlier version of this story contained incorrect information about the venture group where Ashkenazi began working.
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