[Update: 11 am Pacific] AVI Biopharma CEO Les Hudson has been ousted as part of a boardroom shakeup. The Bothell, WA-based biotech company (NASDAQ: [[ticker:AVII]]) said today that chief financial officer David Boyle will take his place as interim president and CEO through an agreement with activist shareholders.
AVI Biopharma director K. Michael Forrest is also stepping down from the board, and being replaced by Anthony Chase. That leaves AVI Biopharma with a seven-member board made up entirely of independent directors. Christopher Henney, the former CEO of Seattle-based Dendreon, and fellow director Michael Casey are not running for re-election at this year’s annual meeting, so two new faces will soon be joining the company’s board.
The shuffling at the top was part of an agreement with a group of shareholders composed of George Haywood, Cheryl Haywood, Rockall Emerging Markets Master Fund Limited, Meldrum Asset Management, Con Egan, and Conor O’Driscoll, according to an AVI statement. The company didn’t explain why the change was necessary, and only described it in the vaguest of terms.
“This agreement reflects the Board and management team’s focus on serving the best interest of all AVI shareholders and building on the strong foundation we have in place,” said Michael Casey, chairman of the AVI board, in a statement.
[Updated comment from spokesman, 11 am Pacific] David Walsey, a spokesman for AVI Biopharma, said the board plans to start a search for a new CEO soon, noting that it will consider internal and external candidates. That means Boyle is a candidate, Walsey says, adding “he has the support of the board now and he may in the future.”
AVI Biopharma has a long and somewhat tortured history. As I pointed out in a breaking news story last July, it is one of the oldest companies in biotech, having sputtered around since 1980 without ever developing an FDA-approved drug, burning through more than $250 million in investor cash, and never becoming profitable. But the company showed some new life last year, raising more than $50 million from investors during the year, adding capital from government grants, and moving to the Seattle area to recruit more staff.
Since Hudson joined in February 2008, he has pushed forward AVI’s technology for precisely blocking specific strands of RNA as a new mode of developing drugs. AVI is using this science to work on experimental treatments for Duchenne muscular dystrophy, and against really dangerous potential bioterrorist agents that conventional drugs can’t stop—Ebola and Marburg virus.
The company is eagerly awaiting detailed results from an early-stage clinical trial later this year for its Duchenne muscular dystrophy treatment, which I previewed in this feature back in February. But this hasn’t been enough to float the boat for investors. AVI Biopharma stock sold for $1.23 in early trading this morning, down just a penny on the news of Hudson’s departure, and still a far cry from the company’s 52-week high of $2.73.
