Alphabet CFO Anat Ashkenazi Leaps From GLP-1 Boom to Generative AI

alphabet Outgoing CFO Ruth Porat has spent the past year and a half trying to help her Internet company navigate the generative artificial intelligence boom. The person who had just been named her successor was immersed in a completely different phenomenon: anti-obesity drugs.

Alphabet announced on Wednesday that Eli Lilly CFO Anat Ashkenazi will be the company's new CFO after a nearly year-long search. During that period, Ashkenazi ran the books of the world's most valuable pharmaceutical company, which saw such demand for its weight-loss treatments Mounjaro and Zepbound that it struggled to maintain supply.

“Hundreds of thousands of people are filling scripts for Monjaro and Zibond, but we understand the frustration of those facing delays in prescriptions or uncertainty in getting their medications,” Ashkenazi said on Eli Lilly's first-quarter earnings call in April.

The two drugs are part of a class of treatments called GLP-1s, which have taken off in the past two years because of their effectiveness in helping people lose weight. The medications, which also treat diabetes, work by mimicking a hormone produced in the intestines to suppress a person's appetite. About 1 in 8 U.S. adults have used GLP-1, according to a survey released last month from the health policy research organization KFF.

Eli Lilly shares are up 90% in the past year and are trading at a record high. In April, the company reported better-than-expected results and raised its full-year guidance.

“During her last three years as Lilly’s CFO, we have seen tremendous growth and laid the foundation to help us reach more patients with our medicines,” Eli Lilly CEO David Rex said in a press release on Wednesday.

Ashkenazi, who spent the past 23 years at Eli Lilly, heads from the pharmaceutical company's Indiana headquarters to the San Francisco Bay Area at the end of July in a similarly pivotal moment for Google. The finance unit has been grappling with a restructuring that has affected the entire company, as Google prioritizes investments in artificial intelligence to keep up with the rapidly evolving market.

Porat is moving into a new role as President and Chief Investment Officer of Alphabet, nine years after joining the company Morgan Stanley. 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 Israel in financial services. When she joined Eli Lilly in 2001, she came through its venture capital division focused on technology in health care.

On her way to the CFO role in 2021, Ashkenazi served as CFO for global divisions, including manufacturing and R&D, and served as chief strategy officer. She took over the finance department after then-CFO John Smiley resigned following allegations of an inappropriate relationship with an employee and the forfeiture of millions of dollars in bonuses and stock awards.

Upon her promotion, Ashkenazi noted a data point that was frustrating: She was the only female CFO in the biopharma sector. She told CNBC in a 2022 interview that her path was relatively easy, as she moved to the United States from Israel more than two decades ago, and came from a very different culture where gender inequality was less of an issue. She was not deterred by being the only woman at the table.

“I couldn't care less,” Ashkenazi said. “But not everyone has that mentality, especially in the Midwest.”

Ashkenazi said on the CFO Thought Leader podcast last year that she has spent five years in different parts of the organization, and she looks at the business from different perspectives.

“This experience has built my skill set in a more comprehensive way,” she said.

Ashkenazi holds 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.

Founded in 1876, Eli Lilly has long been one of the major pharmaceutical companies in the United States. It is known to have introduced the antidepressant Prozac in the 1980s and Cymbalta about 20 years later.

But the past two years have seen a period of historic growth for Eli Lilly due to the growing popularity of GLP-1s. Sales of diabetes drug Monjaro, which topped $5 billion in its first full year on the market, and the rapid launch of its newly approved weight-loss injection Zepbound helped lift Eli Lilly's revenue 20% last year to $34 billion, the fastest growth. Since 1990, according to FactSet.

This success, along with potential drugs like donanemab to treat Alzheimer's disease, has boosted Eli Lilly's market value to nearly $800 billion, making it the largest pharmaceutical company by market capitalization.

As demand for weight loss and diabetes treatments exceeds supply, many patients struggle to find medications. The company has doubled production capacity for its incretin drugs by the end of 2023, with the help of one of its new facilities in North Carolina, Ashkenazi said on an earnings call in February.

Eli Lilly also said it would spend $2.5 billion to open an injectable products manufacturing site in Germany, and invest an additional $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 said on the call.

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

In 2020, the Trump administration announced an agreement to purchase Eli Lilly's COVID-19 antibody treatment as part of the Department of Health's “Operation Warp Speed.” The following year, the FDA halted one of Lilly's COVID-19 antibody treatments, bamlanivimab, as it determined that the treatment alone might not work well against variants.

Eli Lilly jumped into the Covid testing market to try to ramp up production at a time when it was needed most, Ashkenazi said on a CFO podcast.

“We are not a medical device company, and we are not a hospital,” Ashkenazi said. “But we decided to intervene at our expense and set up a testing site in the lower part of our building.”

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

“We didn't stop there,” she said. “We decided to develop treatments, antibody treatments for Covid, which were outside our scope.”

Ashkenazi has had to deal with a lot of public pressure along the way. Last year, as whistleblowers and government groups criticized rising prices for new obesity drugs that were life-saving medications for some, Eli Lilly announced 70% price cuts for its most common insulin as well as an expansion of the program that caps it. The patient's out-of-pocket insulin costs are $35 per month.

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

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

Last year, Eli Lilly settled a lawsuit brought by a former employee, who alleged manufacturing problems and improper practices related to diabetes drugs and insulin pricing. In 2021, the US Department of Justice launched a criminal investigation into Eli Lilly's factory in New Jersey, for alleged manufacturing practices and data falsification. Reuters reported in January that the Food and Drug Administration discovered more deficiencies at the plant last year.

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

The company's core advertising business is improving after a difficult 2023, when companies were cutting ad spending to help manage high inflation and macroeconomic concerns.

Revenue increased 15% in the first quarter, the fastest growth since early 2022. The company announced its first-ever dividend and a $70 billion buyback program. The stock price is up 26% this year and is trading near its all-time high.

But the company has been on the defensive for the past 18 months, after OpenAI's ChatGPT launch in late 2022 caught Google by surprise and raised investor concerns that consumers might soon have new ways to find information online. Google has responded with a series of AI product launches that have been criticized as rushed, and in some cases, the company has been forced to back down due to mishaps.

Meanwhile, despite being one of the largest companies in the world, Alphabet remains a company controlled by its founders, with Larry Page and Sergey Brin “retaining more than 51% of the total voting power of our company while owning less than 12% of the shares.” “, according to the most recent proxy filing.

Ashkenazi also joins at a time of cultural change at a company that during its first two decades was known for its high wages, expensive perks and vibrant culture. Employees have recently expressed frustration with low morale associated with the company's ongoing cost cuts, despite record profits, and a return to office duties after the pandemic.

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

Correction: A previous version of this story included inaccurate information about the group of projects on which Ashkenazi initially worked.

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