Rigel Pharmaceuticals yesterday said it has named a new CEO and a new chairman, both of whom will succeed James M. Gower, who had held both positions since 2001. The change at the top comes as the company looks to bounce back from several clinical setbacks, one of which led to layoffs last year.
Rigel has elevated its president and COO, Raul R. Rodriguez, to CEO and a member of its board of directors, while naming a new chairman Gary Lyons, a member of Rigel's board since 2005.
While a press release said Gower “is retiring” from his positions and the company's board of directors, a Form 8-K filing submitted to the U.S. Securities and Exchange Commission stated instead that Gower “provided notice of his resignation,” adding: “Mr. Gower’s resignation was not the result of any disagreement with the company on any matter relating to the company’s operations, policies, or practices.”
Gower will remain an employee of Rigel until December 31, 2014, after which he will serve as a consultant to the company, “providing advice on strategy, business development, and other matters,” according to the Form 8-K.
The change of leadership came more than three months after Rigel disclosed that its ophthalmic JAK/SYK inhibitor R348 missed both the primary and secondary endpoints in a recently completed Phase II clinical study in patients with dry eye disease. The endpoints were measured by changes in corneal fluorescein staining, conjunctival staining, tear production, and dry eye symptom scores from baseline over 12 weeks of treatment versus placebo.
As a result, Rigel said August 13, it opted not to initiate any new studies of R348 for dry eye disease, and had also ended development of its indirect AMPK activator program R118 due to its side-effect profile in Phase I clinical trials.
However, Rigel added that it would continue its direct AMPK activator research program, was continuing a Phase II study of dry eye in patients with graft versus host disease (GvHD), and would continue two clinical programs for fostamatinib—a Phase III study in patients with immune thrombocytopenic purpura (ITP), and a Phase II study in patients with IgA Nephropathy (IgAN), an autoimmune disease of the kidneys, which the company said November 4 “is expected to begin shortly.”
Fostamatinib was at the center of a partnership between Rigel and AstraZeneca that ended in 2013, when the pharma giant ended efforts to develop the compound for rheumatoid arthritis, opting instead to write off $140 million in associated costs. AstraZeneca acted after a Phase IIb trial of the oral spleen tyrosine kinase inhibitor produced disappointing results when compared with Humira, and earlier Phase III data proved to be mixed.
In August 2013, Rigel said it was halting development of R343 for allergic asthma after the SYK inhibitor failed to meet its primary endpoint in a Phase II study, a change in pre-bronchodilator FEV1 from baseline to dosing completion at Week 8.
The following month, Rigel revealed plans to eliminate 30 positions—about 18% of its workforce and mostly from the drug discovery area—under a restructuring that refocused the company on completing three lead clinical programs. And in October 2013, Rigel ended clinical development of its experimental drug R333 after it failed a Phase II study assessing its effect on the skin disease discoid lupus erythematosus (DLE).
According to the form 8-K, Gower will be paid a severance of “an amount in cash equivalent to 18 months of his current base salary, as well as an amount equal to 18 months of premium payments to extend his health insurance under COBRA.” Gower in 2013 received a base salary of $695,118, part of his total compensation that year of $1,709,874.
Gower will also receive acceleration of vesting of options to purchase 466,669 shares of common stock of the company under his previous awards.
Gower joined Rigel as president and CEO in 1997, and was named chairman in 2001. Rodriguez joined Rigel in 2000 as vp of business development. He was named evp and COO in 2004, and has been president and chief operating officer since 2010.
In the press release, Lyons said Gower and Rodriguez had been working together towards the transition: “We are confident in Raul's capabilities and readiness to lead Rigel into the next phase of growth. “
“We are grateful to Jim for his many years of commitment to Rigel and his role in fostering the company's growth,” Lyons added.