developing small molecule compounds known as immune-system modulators (in this case derived from adrenal steroid hormones), and what Hollis described as “the idea that you could possibly regulate [changes in] immunity and inflammation that occur as you age and become susceptible to a lot of end-of-life diseases.”
It was a strategy that met with some skepticism at the time.
Hollis-Eden went public in 1997 through a reverse merger, and its shares traded over-the-counter until late 1998, when the company’s listing moved to the Nasdaq market.
As a development-stage biopharmaceutical, Hollis-Eden never generated any product revenue, and incurred losses every year since 1994, when the company was officially incorporated. At the end of 2009, Hollis-Eden reported a net loss of $15.6 million and an accumulated deficit of $251.8 million—with only $9.7 million in available cash.
In a regulatory disclosure filed at the time Hollis left the company, Hollis-Eden said he had been fired “for cause” in accordance with his employment contract. The contract spells out a variety of sins for termination, including the improper use of company funds for personal use, fraud, and participating in any activity or engaging in behavior that is competitive or injurious to the company..
Beyond this filing, Hollis-Eden never elaborated or explained why Hollis was fired. James Frincke, who succeeded Hollis as CEO, did not respond to an e-mail query from Xconomy.
Hollis, however, maintains that he was fired because of a dispute with Hollis-Eden’s board of directors. Hollis said the board wanted to halt an ongoing mid-stage clinical trial of HE3286 (Triolex), a small molecule drug the company was advancing as a treatment for type 2 diabetes.
Indeed, according to a 10-K regulatory filing submitted about a year later, Hollis-Eden reported that a series of interim analyses showed the experimental drug was failing to meet its primary endpoint of lowering hemoglobin A1c (HbA1c) in diabetic patients. As the company reported, “There was no statistical difference between treatment and placebo for HbA1c in the overall patient population.”
The great recession was in full throttle at that time, and Hollis said the board wanted to shut down the
