Alphabet CFO Anat Ashkenazi jumps from GLP-1 boom to generative AI

Alphabetical Outgoing Chief Financial Officer Ruth Porat has spent the past year and a half trying to help her internet company weather the AI-generated boom. Her just-named successor has been immersed in an entirely different phenomenon: anti-obesity drugs.

Alphabet made the announcement on Wednesday. Eli Lilly Chief Financial Officer Anat Ashkenazi will take over as the company’s new CFO after a nearly year-long search during which she has run the accounting for the world’s most valuable pharmaceutical company, which has struggled to maintain supplies of its weight-loss drugs Maunjaro and Zepbound amid rising demand.

“Hundreds of thousands of people have filled prescriptions for Maunjaro and Zepbound, and we understand the frustration they are facing prescription delays and uncertainty about their access to the medications,” Ashkenazi said during Eli Lilly’s first-quarter earnings call in April.

The two drugs are part of a class of medications called GLP-1, which have become increasingly popular in recent years for their weight-loss benefits. The diabetes medications mimic a hormone produced in the gut that suppresses appetite. About one in eight U.S. adults use GLP-1, according to research. The survey was last published Month from health policy research organization KFF.

Eli Lilly and Co. shares are up 90% over the past year and trading at all-time highs. The company reported better-than-expected earnings in April and raised its full-year outlook.

“During her final three years as Lilly’s CFO, the company experienced incredible growth and laid the foundation to bring our medicines to even more patients,” Eli Lilly CEO David Ricks said. press release on wednesday.

Ashkenazi, who spent 23 years at Eli Lilly and Co., is leaving the company’s Indiana headquarters for the San Francisco Bay Area at the end of July at a similarly important time for Google, as the company prioritizes investments in AI to keep up with a rapidly evolving market and its finance department grapples with a restructuring that will impact the entire company.

Porat will become Alphabet’s president and chief investment officer. Morgan StanleyBoth she and Ashkenazi will report to CEO Sundar Pichai.

Alphabet did not respond to CNBC’s request for an interview with Ashkenazi.

Ashkenazi, 51, began her career in financial services in Israel and joined Eli Lilly in 2001 in the venture capital division, where she focused on health care technology.

Before becoming CFO in 2021, Ashkenazi served as financial head for global divisions including manufacturing and research and development, as well as chief strategy officer. She succeeded then-CFO John Smiley at the helm of the finance department. Resigned He forfeited millions of dollars in bonuses and stock awards due to alleged inappropriate relationships with employees.

As she rose through the ranks, Ashkenazi was frustrated by the statistics that she was the only female CFO in the biopharmaceutical industry. In a 2022 interview with CNBC, she said her path had been relatively easy because she immigrated to the U.S. from Israel more than 20 years ago and came from a very different culture where gender inequality was not as much of an issue. She wasn’t daunted by being the only woman at the table.

“It doesn’t bother me at all,” Ashkenazi said, “but not everyone has that mentality, especially in the Midwest.”

Ashkenazi said on the CFO Thought Leader podcast last year that he’d worked in different parts of the organization for five years and seen the business from many different perspectives.

“That experience built my skillset more well-rounded,” she said.

According to public documents, Ashkenazi holds a master’s in business administration from Tel Aviv University and a bachelor’s in economics and business administration from Hebrew University.

Founded in 1876, Eli Lilly has long been one of the major US pharmaceutical companies, best known for launching the antidepressant Prozac in the 1980s and Cymbalta about 20 years later.

However, the past few years have been a period of historic growth for Eli Lilly. The explosive popularity of GLP-1. Sales of the diabetes drug Mounjaro have exceeded $5 billion since its launch. The first year Driven by new drugs on the market and the fast launch of a newly approved weight-loss injectable, Zepbound, Eli Lilly’s revenue rose 20 percent last year to $34 billion, its best growth since 1990, according to FactSet.

This success, along with the potential of promising drugs such as Alzheimer’s disease drug donanemab, has helped Eli Lilly’s market capitalization rise to nearly $800 billion, making it the largest pharmaceutical company by market capitalization.

Demand for weight-loss and diabetes drugs has outstripped supply, leaving many patients struggling to get their medications. Ashkenazi said in a February earnings call that it expects to double its incretin drug production capacity by the end of 2023, thanks to one of its new facilities in North Carolina.

Eli Lilly and $2.5 billion Established a manufacturing facility for injectables in Germany addition $1.6 billion The company will build two new production facilities in Indiana, where its headquarters are located.

“Our manufacturing operations continue to execute on the most ambitious expansion plans in our long history,” Ashkenazi said on the conference call.

This is not the first time Ashkenazi has had to oversee rapid production.

In 2020, the Trump administration announced a contract to purchase Eli Lilly’s COVID-19 antibody treatment as part of the Department of Health’s “Operation Warp Speed.” The following year, the U.S. Food and Drug Administration (FDA) Stop The study concluded that bamlanivimab, one of Lilly’s antibody treatments for COVID-19, may not be effective enough against the mutant strains on its own.

Ashkenazi said on the CFO Podcast that Lilly entered the COVID-19 testing market because it was looking to ramp up production at a time when tests were desperately needed.

“We’re not a medical device company or a hospital,” Askenazi said, “but we decided to step in at our own expense and set up a testing site in the basement of our building.”

Ashkenazi has also helped digitize some of the research during the pandemic and expanded predictive analytics for manufacturing and sales.

“We didn’t stop there,” she said. “We decided to develop a treatment, an antibody treatment, for coronaviruses, which is outside the scope of our business.”

Ashkenazi has had to deal with a lot of public pressure in the past. Last year, Eli Lilly filed for bankruptcy amid whistleblowers and government groups criticizing the high price of a new obesity drug that has proved life-saving for some. Price reduction It increased discounts on the most commonly prescribed insulin to 70% and expanded a program that caps patients’ insulin copayments at $35 per month.

An Eli Lilly spokesman said the $35 program existed through Medicare Part D before the announcement.

In April, a $13.5 million settlement was reached between Eli Lilly and purchasers of insulin drugs. Discarded after a judge refused to certify a class in the case.

Last year, Eli Lilly Calm A whistleblower lawsuit by a former employee alleged manufacturing problems and irregularities regarding the pricing of diabetes medications and insulin. In 2021, the U.S. Department of Justice opened a criminal investigation into an Eli Lilly plant in New Jersey for alleged manufacturing practices and data falsification. Reuters reported in January that the FDA found more defects at the plant last year.

At Alphabet, Ashkenazi inherits an equally large but very different set of challenges.

The company’s core advertising business is on track to recover after a difficult 2023, when companies cut advertising spending to weather rising inflation and macroeconomic concerns.

Revenue Shares rose 15% in the first quarter, their fastest growth since the beginning of 2022. The company announced its first-ever dividend and a $70 billion share repurchase program. Shares are up 26% this year and trading near all-time highs.

But the company has been on the defensive for much of the past 18 months since it released OpenAI’s ChatGPT in late 2022. The release caught Google off guard and raised investor concerns that consumers might soon have new ways to find information online. Google responded with a series of generative AI products, but was criticized for being too hasty and in some cases was forced to backtrack due to issues.

Meanwhile, despite being one of the world’s largest companies, Alphabet is a founder-led company, with Larry Page and Sergey Brin “owning less than 12% of the stock, while controlling more than 51% of the company’s total voting power,” the latest report said. Submitting a power of attorney.

Ashkenazi also joins at a time of cultural change at a company known for high salaries, lavish perks and a vibrant culture during its first decades, as employees have recently expressed frustration with continued cost-cutting despite record profits and low morale as people are ordered to return to the office after the pandemic.

—CNBC’s Eric Rosenbaum and NBC researcher Toby Lyles contributed to this report.

Fix: An earlier version of this article contained inaccurate information about the venture group where Ashkenazi first worked.

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