A Medical Device Daily
ThermoGenesis (Rancho Cordova, California), a supplier of products and services that process and store adult stem cells, said that William Osgood, PhD, has agreed to resign as CEO and a director of the company, effective immediately. The board has named Matthew Plavan, the company's executive VP and CFO, as ThermoGenesis' interim CEO.
The company also reported that in conjunction with the management transition it would initiate a corporate reorganization designed to accelerate near-term revenue growth and refocus efforts on reducing expenses and improving financial performance.
"This transition occurred as a result of a recognition by both the board and Bill that there was a clear difference of opinion regarding the future direction of the company and what was necessary for ThermoGenesis to achieve its financial goals, particularly with respect to a strategy for accelerating near term revenues and managing operating expenses to improve the bottom line performance of the company," Plavan told conference call listeners yesterday morning.
"The board felt that realizing these goals was critical to maximizing shareholder value both now and in the future, particularly in view of the current economic environment. When it became clear that these strategies and tactical differences were not going to be resolved, both our board and Bill agreed that it made sense for Bill to resign his position at the company."
Plavan said the reorganization would likely result in "some headcount reduction" at ThermoGenesis, but that the company has not yet determined the extent or timing of that process.
"In his nearly four years at the company, Matt has been intimately involved in the daily operations of the company, including our recent business development efforts with General Electric Healthcare and others, and engendered a high level of respect among the other members of senior management and our employees," Chairman Hubert Huckel, MD, said in a company statement. "The board has a high degree of confidence in Matt's ability to lead the company while we conduct a search for a new CEO."
Plavan joined ThermoGenesis in May 2005 as CFO and was named executive VP earlier this year. Prior to joining the company, he held senior financial and operations management positions at several healthcare and technology companies, including McKesson, and was an audit manager with Ernst & Young.
"I appreciate the confidence our board has demonstrated in me and I look forward to driving the company forward on our strategy as we capitalize on opportunities in our core cord blood business and develop near-term revenue opportunities," Plavan said. "We have the assets, including leading-edge technology, a newly strengthened quality team, dedicated employees, and a solid balance sheet, to achieve our goals."
At least one shareholder listening to yesterday's call was not happy with the way the board handled the management transition.
"If [Osgood] wasn't the right guy, you would have surely thought there was a better way to do it than to announce yesterday afternoon that he is no longer with the company," said the listener, who described himself as a longtime shareholder. "I don't know if we're able to say at this point that we're a better company today without Bill Osgood than we were yesterday. I understand you do what you have to do but these are very trying times out here and I would say that this board needs to be put on notice at this point that the shareholders are not happy."
Plavan said the company is developing a "strategic plan" to reach its financial goals for fiscal 2009. These goals include revenue growth of 10% to 20% over fiscal 2008 and become profitable in 4Q09, based on the company's "ability to add new AXP customers, initiate a successful launch of our new products and realize successful management of operating expenses."
In response to another shareholder question during the call, Plavan said the company plans to focus more on maximizing potential for the autoXpress (AXP) solution through its distribution relationships. He also said there is "much more business to be had through the GE relationship," and that launching the MarrowXpress (MXP) device and the Res-Q product were also important to the company's short term goals.
ThermoGenesis also reported updates on key operational milestones, including:
– With respect to the previously reported company-initiated recall of selected AXP bag sets, ThermoGenesis has provided its remediation plan to the FDA and is awaiting confirmation from the agency.
– The company expects to begin shipping its MXP device and disposables this quarter through its newly established distribution agreement with a subsidiary of Spine Smith. In addition, ThermoGenesis has recently added several new distributors for its BioArchive System and AXP offerings.
– The market program for the company's Res-Q, a point-of-care solution for bone marrow processing and peripheral blood platelet concentration, is on track for launch in the equine market in the company's fiscal 2009 third quarter, with sales in the human market expected to begin in 4Q09.
– The company said it remains on track to complete the disposition of its ThermoLine business during the current quarter.