For some reason, I cannot comprehend the first option.
(X) The professor is said that he was a genius when young.
The above sentence does not make any sense to me.
While with second option:
The professor is said to have been a genius when young.
Makes at least a little sense.
With the first option merged in the sentence, there is no clarity who said that the professor was a genius. Maybe, remove the word is after the subject and the first option would be a fit. Other than that, it doesn't make sense to me.
As for the second option, it makes more sense when it's put together in the sentence, as it means that someone else (or a rumour) said that the professor was a genius.