Optimer Pharmaceuticals said today it named its board chairman, a familiar name in pharma circles, to the additional role of CEO. Henry McKinnell, Ph.D., who served as Pfizer’s CEO from 2001–06, will continue to head Optimer’s board as it conducts a strategic review that could lead to a sale.
Dr. McKinnell succeeds Pedro Lichtinger, Optimer's president and CEO since May 2010, and will serve as CEO at least “for the duration of the strategic review process,” the company said in a statement. Optimer’s board also replaced its general counsel and chief compliance officer, with Kurt Hartman stepping down and being succeeded by Meredith Schaum.
“The independent directors recommended to the board that management changes were appropriate following their review of prior compliance, record keeping, and conflict-of-interest issues observed during the review, including issues arising from the conduct of Optimer personnel who were the subject of the changes in management and leadership announced in April 2012,” Optimer said in the statement. “The previously disclosed investigations of these issues by the relevant U.S. authorities are ongoing and the company continues to cooperate with those authorities.”
On April 9, 2012, Optimer announced a shakeup in which its board removed the company’s co-founder, Michael Chang, Ph.D., as chairman, and terminated CFO John D. Prunty and vp Youe-Kong Shue, Ph.D. The shakeup followed a conflict-of-interest flap stemming from Dr. Chang receiving—“potentially for the benefit of a third party,” according to a company statement—1.5 million shares of Optimer’s 43%-owned independent, Taiwanese-based affiliate, Optimer Biotechnology (OBI), on whose board Dr. Chang served as the parent company’s representative.
The board cited what it called in a statement “his failure to identify and effectively manage compliance, record keeping, and conflict of interest issues” in connection with the stock grant, adding: “The terminations of Mr. Prunty and Dr. Shue were related to the belief of Optimer's independent directors that both individuals failed to follow proper procedures when they became aware of the issues related to the issuance of the OBI shares to Dr. Chang.”
Dr. Chang, the company’s president and CEO from its inception in November 1998 until May 2010, was succeeded as president and CEO by Lichtinger, and as chairman by Dr. McKinnell, who until then had been lead independent director.
Tucked in its statement on Dr. McKinnell’s appointment as CEO, Optimer also said today its board hired J.P. Morgan and Centerview Partners as financial advisers, and the law firm Sullivan & Cromwell as its legal adviser, in connection with the strategic review. The board said it would not comment until completion of the review, which it cautioned may not result in any action.
News of the strategic review helped boost Optimer shares, whose price on NASDAQ as of 10 a.m. today stood at $12.36, 15% above yesterday’s closing price of $10.72.
Optimer announced Dr. McKinnell’s appointment as CEO a day before it is scheduled to release full fourth-quarter and full-year 2012 results. Last month the company presented partial preliminary results to investors—namely a near-doubling year-over-year in gross product sales of its Dificid (fidaxomicin) antibacterial tablets during Q4 2012, to $21.3 million from $11 million in Q4 2011. For all of last year, Optimer saw gross product sales of Dificid more than triple, to $74.4 million from $24.4 million in 2011.
Launched in July 2011, Dificid is approved in the U.S. for Clostridium difficile-associated diarrhea in adults 18 years of age and older.
"While the board is conducting a comprehensive review of strategic alternatives to maximize shareholder value, I look forward to working with the management team to continue to increase the utilization of Dificid,” Dr. McKinnell said in the statement.
During its most recent announced results, covering the third quarter of 2012, Optimer finished with a net loss of $26.8 million, all-but flat from Q3 2011’s net loss of $26.4 million, despite a nearly two-thirds jump in revenues, to $17.9 million from $11.1 million in Q3 2011, mostly reflecting Dificid sales. Dificid net sales of $16.0 million in Q3 2012 reflected a 51.5% increase over the previous third quarter.