This is not AGPH-related, but it relates to my comments yesterday concerning management decisions at Amgen and Chiron........
Dow Jones News Service -- January 29, 1997
Chiron Shake-Up Goes To Top As Search Starts For CEO
By Jesse Eisinger
NEW YORK (Dow Jones)--Continuing a management restructuring meant to
shore up its operating expertise, Chiron Corp.
(CHIR) said it was looking for a new chief executive.
The current president and chief executive of the second-largest
biotechnology company in the world, Edward Penhoet, will
move upstairs to become vice chairman. William Rutter will continue as
chairman, but he, too, loses some operational
authority. The new CEO will take over responsibility for selling the
products and managing the operations. A Chiron
spokesman said the search could take up to half a year and would not be
confined to candidates within biotech or health care.
Chiron is frequently credited with outstanding science but the company
has had difficulty parlaying its research ability into
steady revenue and profits, especially during the last year.
Chiron has been described as ''a vacuum cleaner of technology. The big
challenge to management is to prioritize and focus,''
said Kai Lindholst, managing director of the executive search firm Egon
Zehnder International Inc. ''I would expect them to
stay within the industry, partly because of the very strong science
component.''
''I think it is a very positive move,'' said David Molowa, an analyst for
Bear Stearns & Co. ''I've been hoping it would
happen for about two years now.''
Penhoet and Rutter are ''visionaries, strategists and research experts,''
but they ''needed someone with operational
expertise. The business may have suffered from'' a lack of such
expertise, said Molowa.
''The research and development effort has been less-than-steller at
developing products,'' said Paul Kelly, of UBS Securities
Inc. ''Sooner or later something has to come out of that pipeline.''
Several of Chiron's many divisions have had difficulties, but the vaccine
unit has been particularly troubled. In late
November, the company said it would not pursue development of a genital
herpes vaccine after it failed in late-stage trials.
Chiron's whooping cough vaccine faced inexorable delays and the company
was last in the U.S. among several competitors
to file for approval.
Also last year, its 49.9% owner Novartis AG took back the full rights for
the cancer drug Aredia, which is expected to be a
large-selling drug. And Vitrasert, an implant to treat cytomegalovirus in
AIDS patients, is turning out to be a tiny-selling
product.
Earnings performance has been weak. Not including regular research and
development payments from Novartis, Chiron is
losing money.
The search for a chief executive is an extension of a continuing
management turnover. Some analysts suggested the shake-up
may have been inititated at Novartis' request.
Earlier this month, Dino Dina, the president of Chiron's struggling
vaccine unit, resigned. Observers say Dina was probably
eased or forced out, but a Chiron spokesman said he is leaving his
position voluntarily. Walter Moos, a vice president of
drug discovery and design, left earlier this month as well, to become CEO
of a start-up.
Both Penhoet and Rutter helped found the Emeryville, Calif., company in
1981, along with Pablo Valenzuela, who is
currently a Chiron senior vice president for biological research. Rutter
and Valenzuela were in the biochemistry department of
the University of California at San Francisco. Penhoet, a former graduate
student of Rutter's, was a professor of molecular
biology at U.C.-Berkeley. |
