LONDON - Cantab Pharmaceuticals plc CEO Jurek Sikorski resigned last week following criticism from non-executive directors that he was failing to deliver on the strategy of building a bigger pipeline and reducing risk through merger and acquisition activity.
Following his removal, the directors ordered a strategic review of the company's activities, which may result in the sale of Cantab. Nick Hart, financial director, will be acting CEO.
Sikorski's resignation came a week after one of its lead products, TH-GW for the treatment of genital warts, failed in the first of two Phase II trials being carried out by Cantab's partner, SmithKline Beecham. The news prompted Cantab's share price to fall by two-thirds.
Andy Burrows, director of media and investor relations, told BioWorld International that the failure of TH-GW had nothing to do with Sikorski leaving the company. "You can't blame the CEO for the failure of clinical trials," he said.
"But the strategy says the company should look for mergers and acquisitions and this has not happened. As a result, there have been concerns among shareholders that Cantab was not succeeding when it espoused this as the way forward."
Burrows said, "Some people are just good deal makers. The board considers that Jurek has good qualities in terms of running the company, but not the right skills set for [delivering] mergers and acquisitions."
In March 2000 Cantab, based in Cambridge, England, approached its fellow vaccines and immunotherapeutics company Peptide Therapeutics plc with a view of a takeover. Talks were undermined in August by a sharp fall in Cantab's share price caused when another of its partners, Glaxo Wellcome plc, handed back rights to DISC HSV, a vaccine against genital herpes. Then the deal was called off in September after Peptide entered a #27.8 million alliance with Baxter Healthcare Corp.
Burrows said it was not clear when the strategic review of Cantab's activities would be completed or conclusions implemented, but, "A sale is one option to be looked at."
The review will be carried out by Cantab's advisers, Credit Suisse First Boston, with Jeremy Curnock Cook, who has stepped up from non-executive director to be part-time executive deputy chairman of Cantab.
Earlier this year Curnock Cook resigned his position as director of the UK biotech investment trust, International Biotechnology Trust (IBT), and as head of the Rothschild Bioscience Unit, which manages IBT's investments. This followed pressure from the arbitrageur Millennium Partners LP of New York, which owns 10 percent of IBT. Millennium raised questions about the share options granted to Curnock Cook as a non-executive director of companies in which IBT invests.
Burrows said Curnock Cook will be dedicated to the task of handling the review.
Cantab's share price recovered slightly last week, gaining 7 percent to close at 81 pence on Friday. At the beginning of March the share price was over #4.