Optimer Discloses Shakeup Prompted by Chairman’s Deal in Taiwan

A deal involving an affiliated Taiwanese company prompted the board at San Diego’s Optimer Pharmaceuticals (NASDAQ: [[ticker:OPTR]]) to seek the ouster of the co-founder and chairman, Michael Chang, and to fire the company’s chief financial officer and a vice president.

In a statement released before the market opened, Optimer also says it disclosed the deal to “relevant U.S. authorities and is cooperating with those authorities in reviewing the matter.”

Shares of Optimer declined by nearly 7 percent, or nearly $1 a share, and were trading around $13.35 a share in mid-day trading in above-average volume on the NASDAQ market. The San Diego drug developer won FDA approval last year for fidaxomicin (Dificid), an antibacterial drug intended for patients with Clostridium difficile-associated diarrhea.

Seven of Optimer’s eight directors voted to strip Chang as chairman, and asked for his resignation from the board. The company today named former Pfizer CEO Hank McKinnell as its new chairman, saying the shakeup was prompted by to Chang’s actions as Optimer’s representative on the board of the affiliated Taiwanese company, Optimer Biotechnology Inc. (OBI). The board appointed McKinnell as lead independent director on Feb. 29.

Optimer holds a 43-percent stake in OBI. In its statement today, Optimer also cites Chang’s “failure to identify and effectively manage compliance, record keeping, and conflict of interest issues in connection with OBI’s grant to Dr. Chang, potentially for the benefit of a third party, of 1.5 million shares of OBI.”

Optimer’s board also fired CFO John Prunty and Youe-Kong Shue, the vice president for clinical development who has served as the CEO of OBI since 2009. The company says their dismissal was prompted by their failure “to follow proper procedures when they became aware of the issues related to the issuance of the OBI shares to Dr. Chang.”

The company also says Kurt Hartman, its general counsel, chief compliance officer and senior vice president, would serve as acting CFO.

Optimer says the shakeup is not expected to “materially impact” the company’s revenues or operations, including its commercialization of fidaxomicin.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.