Rock­well's CEO re­fus­es to be fired, kick­ing up brawl with board that halts the com­pa­ny's stock

There’s an episode of Se­in­feld that ran in the late 90s in which George Costan­za tries — un­suc­cess­ful­ly — to break up with his girl­friend Mau­ra. “I refuse to give up on this re­la­tion­ship,” she says. “It’s like… launch­ing mis­siles from a sub­ma­rine. Both of us have to turn our keys.” When George urges her to “turn her key,” Mau­ra re­spect­ful­ly de­clines.

Robert Chioi­ni

The same sce­nario is play­ing out to­day at a mid-sized biotech just out­side of De­troit. Rock­well Med­ical’s board has vot­ed to fire its CEO Robert Chioi­ni. But the CEO won’t turn his key. He’s… un­fired him­self, al­leg­ing that Rock­well Med­ical’s board mem­bers may have vi­o­lat­ed fed­er­al se­cu­ri­ties laws by vot­ing him out. That’s be­cause the pur­pose of this par­tic­u­lar meet­ing was to dis­cuss al­le­ga­tions of breach­es of fidu­cia­ry du­ties, not to vote on fir­ing the CEO.

“As that ac­tion was not the pur­pose of the spe­cial meet­ing, the ter­mi­na­tion of the CEO, in the opin­ion of the non-con­flict­ed in­de­pen­dent di­rec­tors, was not ef­fec­tive,” writes Chioi­ni in a let­ter to share­hold­ers.

If that wasn’t enough, Rock­well Med­ical al­so fired its CFO Thomas Kle­ma, who they said was col­lud­ing with the CEO. But that’s OK, be­cause Chioi­ni al­so re­ject­ed that de­ci­sion, un­fir­ing Kle­ma short­ly af­ter via a let­ter to share­hold­ers.

“The chair­man of board is­sued a sec­ond con­flict­ing 8K this morn­ing,” Chioi­ni wrote. “There­in is ref­er­enced a board meet­ing in which it is as­sert­ed that the CFO, Thomas Kle­ma, was ter­mi­nat­ed. I have no in­for­ma­tion to sug­gest the gov­er­nance re­quire­ments to call such a meet­ing were fol­lowed. The same 8K states that the board cre­at­ed a Spe­cial Tran­si­tion Com­mit­tee com­prised of Ben­jamin Wolin, Lisa Coller­an, and John Coop­er, to pro­vide board-lev­el over­sight of the com­pa­ny’s strate­gic di­rec­tion and day-to-day op­er­a­tions dur­ing the com­pa­ny’s tran­si­tion. I have no in­for­ma­tion to sug­gest that the gov­er­nance re­quire­ments for the cre­ation of such a com­mit­tee were fol­lowed.”

This bizarre sto­ry is par­tic­u­lar­ly in­ter­est­ing in light of Chioi­ni’s salary — $850,000 an­nu­al­ly for the past three years, with to­tal com­pen­sa­tion top­ping $12 mil­lion. That’s pret­ty de­cent for a com­pa­ny that hasn’t scored any com­mer­cial sales for two prod­ucts it won FDA ap­proval for in 2014 and 2015, as not­ed by STAT colum­nist Adam Feuer­stein yes­ter­day.

The com­pa­ny’s stock $RMTI has been halt­ed due to the dra­ma.

Rock­well Med­ical’s sit­u­a­tion re­minds us of an­oth­er biotech duk­ing it out with its ex-CEO. Arc­turus Ther­a­peu­tics has been in a very pub­lic bat­tle with its for­mer chief Joe Payne, who’s been work­ing hard to un­do the work of its board. It will be in­ter­est­ing to see if these ex-CEOs can el­bow their way back in­to board rooms in the com­ing months.

Mer­ck is tak­ing the ax to its US op­er­a­tions, cut­ting 500 jobs in its lat­est re­or­ga­ni­za­tion

Merck is cutting 500 jobs in its US sales and headquarters commercial teams in its latest effort to find new ways to streamline the operation.

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Alice Shaw, Lung Cancer Foundation of America

Top ALK ex­pert and can­cer drug re­searcher Al­ice Shaw bids adieu to acad­e­mia, hel­lo to No­var­tis

Jay Bradner has recruited a marquee oncology drug researcher into the ranks of the Novartis Institutes for BioMedical Research. Alice Shaw is jumping from prestigious posts intertwined through Mass General, Harvard and Dana-Farber to take the lead of NIBR’s translational clinical oncology group.

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Med­ical an­i­ma­tion: Mak­ing it eas­i­er for the site and the pa­tient to un­der­stand

Medical animation has in recent years become an increasingly important tool for conveying niche information to a varied audience, particularly to those audiences without expertise in the specialist area. Science programmes today, for example, have moved from the piece-to-camera of the university professor explaining how a complex disease mechanism works, to actually showing the viewer first-hand what it might look like to shrink ourselves down to the size of an ant’s foot, and travel inside the human body to witness these processes in action. Effectively communicating a complex disease pathophysiology, or the novel mechanism of action of a new drug, can be complex. This is especially difficult when the audience domain knowledge is limited or non-existent. Medical animation can help with this communication challenge in several ways.
Improved accessibility to visualisation
Visualisation is a core component of our ability to understand a concept. Ask 10 people to visualise an apple, and each will come up with a slightly different image, some apples smaller than others, some more round, some with bites taken. Acceptable, you say, we can move on to the next part of the story. Now ask 10 people to visualise how HIV’s capsid protein gets arranged into the hexamers and pentamers that form the viral capsid that holds HIV’s genetic material. This request may pose a challenge even to someone with some virology knowledge, and it is that inability to effectively visualise what is going on that holds us back from fully understanding the rest of the story. So how does medical animation help us to overcome this visualisation challenge?

Hal Barron, GSK's president of R&D and CSO, speaks to Endpoints News founder and editor John Carroll in London at Endpoints' #UKBIO19 summit on October 8, 2019

[Video] Cel­e­brat­ing tri­al fail­ures, chang­ing the cul­ture and al­ly­ing with Cal­i­for­nia dream­ers: R&D chief Hal Bar­ron talks about a new era at GSK

Last week I had a chance to sit down with Hal Barron at Endpoints’ #UKBIO19 summit to discuss his views on R&D at GSK, a topic that has been central to his life since he took the top research post close to 2 years ago. During the conversation, Barron talked about changing the culture at GSK, a move that involves several new approaches — one of which involves celebrating their setbacks as they shift resources to the most promising programs in the pipeline. Barron also discussed his new alliances in the Bay Area — including his collaboration pact with Lyell, which we covered here — frankly assesses the pluses and minuses of the UK drug development scene, and talks about his plans for making GSK a much more effective drug developer.

This is one discussion you won’t want to miss. Insider and Enterprise subscribers can log-in to watch the video.

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Flu Virus (Source: CDC)

FDA ex­pands Xofluza ap­proval as Roche strug­gles to catch loom­ing flu mar­ket

As a potentially powerful flu season looms, so does a big test for Roche and its new flu drug, Xofluza. The Swiss giant just got a small boost in advance of that test as the FDA expanded Xofluza’s indication to include patients at high risk of developing flu-related complications.

Xofluza (baloxavir marboxil) was approved last October in the US, the first landmark flu drug approval in 20 years and a much-needed green light for a company that had watched its leading flu drug Tamiflu get eaten alive by generics. Like its predecessor, the pill offered a reduction in flu symptoms but not a cure.

EMA backs sev­en ther­a­pies, in­clud­ing Mer­ck­'s Ebo­la vac­cine

The first-ever Ebola vaccine is on the precipice of approval after the European Medicine’s Agency (EMA) backed the Merck product in this week’s roster of recommendations.

The drugmaker $MRK began developing the vaccine, christened Ervebo, during the West African outbreak that occurred between 2014 and 2016, killing more than 11,000.

The current outbreak in the Democratic Republic of Congo (DRC) has shown case fatality rates of approximately 67%, the agency estimated. Earlier this year, the WHO declared the outbreak — which so far has infected more than 3,000 people — a public health emergency of international concern.

Ronald Herb­st fol­lows Med­Im­mune ex­o­dus to Pyx­is CSO post; Jeff God­dard to suc­ceed CEO of AIT Bio­science

→ The outflow of top execs from MedImmune continues to fill the leadership ranks of smaller biotechs. The latest to take off is Ronald Herbst, the head of oncology research, who’s assuming the CSO post at Pyxis Oncology.  

Herbst was part of the old MedImmune organization AstraZeneca CEO Pascal Soriot restructured earlier this year, reorganizing the company and eliminating the storied subsidiary as a separate organization.

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UP­DAT­ED: J&J's Xarel­to, Amar­in's Vas­cepa are cost-ef­fec­tive, not bud­get friend­ly — ICER

ICER, an increasingly influential cost-effectiveness watchdog in the United States, has concluded in its review of treatments for cardiovascular disease that while the cost of J&J’s Xarelto and Amarin’s Vascepa meet its benchmark for value pricing — the two treatments will not likely treat as many patients as hoped without surpassing the annual budget threshold calculated by ICER for each therapy.

Mi­rati preps its first look at their KRAS G12C con­tender, and they have to clear a high bar for suc­cess

If you’re a big KRAS G12C fan, mark your calendars for October 28 at 4:20 pm EDT.

That’s when Mirati $MRTX will unveil its first peek at the early clinical data available on MRTX849 in presentations at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston.

Mirati has been experiencing the full effect of a rival’s initial success at targeting the G12C pocket found on KRAS, offering the biotech some support on the concept they’re after — and biotech fans a race to the top. Amgen made a big splash with its first positive snapshot on lung cancer, but deflated sky-high expectations as it proved harder to find similar benefits in other types of cancers.

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