San Diego Biotech Hollis-Eden Terminates CEO

Hollis-Eden Pharmaceuticals (NASDAQ: [[ticker:HEPH]]) said in a government filing yesterday that a special committee of the biotech’s board of directors has fired Richard Hollis, the company’s namesake and founding CEO.

In its notice, the San Diego company disclosed only that Hollis was terminated on March 18 pursuant to the section of his 1996 employment contract that details termination “for cause.” The San Diego Union-Tribune reported the firing this morning. The CEO’s employment contract was included in a 1996 filing that preceded the 1997 merger that enabled Hollis-Eden to become a public company.

In the employment agreement, such conditions include breaching an employment contract; participating in any activity or engaging in behavior that is competitive or injurious to the company; committing fraud against the company; improper use of company funds or property for personal use; or conviction of a crime.

Neither Hollis-Eden, which did not issue a press release about the matter, nor members of its board would comment further—and the newspaper reported that Richard Hollis could not be reached for comment.

The company’s chief operating officer, James Frincke, was named interim chief executive.

Hollis founded the biotech in 1994 to develop therapies based on a synthetic form of HDEA, an adrenal hormone that helps strengthen the body’s immune system. After the Sept. 11, 2001, terrorist attacks, the San Diego biotech made a fateful decision to develop Nemmune, a drug to treat radiation sickness. The company anticipated that the U.S. government would place a blockbuster order for the drug, but in 2007 the government officially announced it would not make such an order.

The company’s stock plunged and never recovered. Hollis-Eden shares were trading down from the opening at 42 cents a share earlier today.

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.