Arcturus Terminates CEO, Names Mark Herber as Interim President

Arcturus photo used with permission

Arcturus Therapeutics (NASDAQ: [[ticker:ARCT]]) said today it has fired co-founder and CEO Joseph E. Payne (on the right in above photo), and named Mark Herber, vice president of business development and alliance management, as interim president.

The San Diego-based early stage biotech, which specializes in RNA medicines, did not explain in a statement today why the Arcturus board decided to terminate Payne—only that his dismissal “is not related to Arcturus’ operational performance, ongoing programs, financial condition, or financial reporting.”

The unexpected announcement nevertheless sent the price of Arcturus shares spiraling in after-hours trading, falling by $1.38, nearly 19 percent, to $5.93 a share.

Asked why Payne was terminated, Trevor Gibbons, a spokesman for the company in New York said, “We’re just not commenting beyond the release at this time.”

Payne is still listed on the company’s website as an Arcturus board member, though, and Gibbons confirmed that Payne remains on the board.

In a January 3 regulatory filing, Arcturus disclosed that it had completed its merger with Alcobra, an Israel-based biotech trading on the Nasdaq exchange, on November 15. As Payne explained the deal in October, Alcobra shareholders would own about 40 percent of the combined company while Arcturus shareholders will own about 60 percent.

Arcturus executive chairman Stuart Collinson voiced confidence in today’s statement in Herbert as “a seasoned biotechnology leader who has gained a deep understanding of our strategy, business and partnerships since joining the company in 2015.”

Payne, a scientist and pharmaceutical executive, was a senior manager in Oceanside, CA, with a subsidiary of the Japanese conglomerate Nitto Denko when he co-founded Arcturus in 2013 with Pad Chivukula, who is the startup’s chief operating officer and chief scientific officer. The subsidiary was established with an R&D focus that included drug delivery, gene delivery, and related technologies for nucleic acid synthesis.

Payne did not immediately respond to an e-mailed request for comment.

As a scientist, Payne worked previously at San Diego-based Kalypsys, Merck (NYSE: [[ticker:MRK]]), and DuPont Pharmaceuticals, and compiled a record of using sophisticated targeted RNAi nanoparticle technologies to usher new drugs into the clinic, according to his Linkedin profile.

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.