FORTUNE -- A good CFO is a master of numbers who can juggle conflicting imperatives: manage working capital (save cash!); return money to shareholders (spend cash!); invest for the future (spend now, save later!). Biogen Idec (BIIB) CFO Paul Clancy has demonstrated such acumen, helping the company generate 21% annual earnings per share growth from 2007 to 2011. Unlike the many CFOs who buy high and sell low in share buybacks, for example, Clancy nailed it. The biotech company purchased 82 million shares (about a third of those outstanding) as they traded near a long-term low. The market eventually agreed with Clancy's view that the stock was undervalued, and the price has nearly tripled, to $150.
Clancy, 50, is more than a finance Jedi. He excels in the often overlooked side of the job: communication and diplomacy. Clancy was entrusted with the care and feeding of Carl Icahn when that most activist of investors began agitating for a breakup and sale of Biogen in 2007, and over three arduous years achieved peace to both sides' satisfaction. "Paul did a phenomenal job communicating with investors," says analyst Mark Schoenebaum of ISI Group. "He doesn't spin the issues, which is the way everyone in senior management should be, but isn't. He built a track record of credibility."
Icahn targeted Biogen because the company had expanded into treatment areas, such as cardiology and oncology, that have nothing to do with its expertise in multiple-sclerosis drugs. Resources were spread thin. Biogen had just brought its breakthrough MS treatment, Tysabri, back to market after voluntarily pulling it -- a process Clancy handled with aplomb, according to analysts -- when it was linked to a rare and often deadly condition. Icahn wanted to break Biogen up and feed the pieces to Big Pharma.
After a failed attempt at a sale, Clancy worked with the board to address Icahn's concerns. Biogen began concentrating on MS and related diseases. Clancy also pushed to excise crippling bureaucracy, says UBS analyst Matt Roden. Biogen seemed to have as many layers of management as Pepsi (PEP) (whose revenue is 13 times larger), where Clancy had previously worked.
"The most important thing I did during that period was to listen," Clancy says. "Even in good times, no company is clicking on every single cylinder. I want to have an open dialogue so I can tell investors what is and isn't working well, and why."
Today Biogen is running smoothly. Expectations are high for BG-12, an MS treatment that could launch next year. The company is expanding again, but this time focusing only on neurodegenerative diseases similar to MS, such as amyotrophic lateral sclerosis and muscular dystrophy. Wall Street has started to ask when Biogen will issue a dividend. Clancy says it's too soon for that kind of move. But it's telling that, instead of discussing what kind of surgery is necessary to fix the company, as used to be the case, analysts now ask what he plans to do with the company's rising profits.
This story is from the October 8, 2012 issue of Fortune.
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