BioWorld International Correspondent
LONDON - SkyePharma plc went ahead with the appointment of a new CEO, chief operating officer and nonexecutive chairman, leaving activist shareholders - who have requisitioned an extraordinary general meeting to appoint their man to the board, saying their views are "wholly unchanged" by the announcement.
The London-based company opted for respiratory specialists for the posts of CEO and chief operating officer, underlining the central position of the dual-action inhaled asthma product flutiform, in the drug delivery specialist's future prosperity.
New CEO Frank Cordello was president of European operations for Miami-based IVAX Pharmaceuticals Ltd. (now part of Teva Pharmaceutical Industries Ltd.), managing the acquisition of 3M's branded respiratory business. New chief operating officer Ken Cunningham was CEO of Arakis plc, a privately held UK company that licensed a treatment for chronic obstructive pulmonary disease to Novartis AG last year in a deal worth up to $355 million.
Those two join Jerry Karabelas, who is stepping up from nonexecutive director to nonexecutive chairman.
Activist shareholders, led by North Atlantic Value (NAV) LLP, are demanding Bob Thian, who chairs the laboratory products company Whatman plc, be appointed chairman. Two weeks ago they succeeded in one of their objectives, forcing the founder of SkyePharma, Ian Gowrie-Smith, to step down as chairman. However, he remains a director and NAV also wants him removed with immediate effect.
SkyePharma's statement said its nominations committee had met with Thian, who told them he had no interest in a nonexecutive post.
"It is the view of the SkyePharma board that Mr. Thian already has substantial board commitments and that adding an executive role at SkyePharma would exceed his available capacity, particularly given the need for him to address problems at Whatman in the light of its recent profits warning," SkyePharma said.
The statement also argued that Thian lacks recent relevant experience in the therapeutic areas in which SkyePharma operates, and that while he has built his reputation on restructuring, what SkyePharma needs is to develop the company to maximize the value in the pipeline.
"Both Frank and Ken have current and highly relevant pharmaceutical industry experience," Karabelas said. "By contrast, Mr. Thian has not had an executive role in pharmaceuticals since 1989 and has limited visibility in the industry."
NAV responded by renewing its call for an EGM, adding, "SkyePharma's performance over many years has been one of overpromise and underdelivery, and many of the individuals associated with this underperformance will continue to be associated with the company."
Last week's appointment of Karabelas was accompanied by plans to sell off the injectables side of the business. That evoked a similar response from NAV, which said, "The requisitionists are particularly disappointed that not only has the company elected to choose an insider [as chairman] who is closely associated with the past five years of share price underperformance, but that the company has taken such a provocative stance in relation to the strategic review. There is also no mention of a date for an EGM."
The argument over SkyePharma was sparked when a strategic review, initiated in late 2005, failed to find a buyer for the business as a whole. Instead, SkyePharma proposed selling off its injectables business to concentrate on oral and pulmonary products.
The injectables business consists of two marketed products - the cancer treatment DepoCyt, and Depodur for the treatment of post-surgical pain - and a pipeline of drugs in various stages, including the controlled-release injectable formulations of certain un-named biopharmaceuticals, and DepoBupivacaine, a long-acting, injectable formulation of the local anesthetic bupivacaine, which is ready for Phase III.