TKT chief quits; new CEO vows to end slide
By Naomi Aoki, Globe Staff, 2/12/2003
Transkaryotic Therapies Inc.'s founder and CEO, Richard Selden, resigned yesterday, ending a
15-year tenure at the Cambridge biotechnology firm, which has suffered a series of legal,
regulatory, and financial setbacks.
In its announcement yesterday, TKT said Michael J. Astrue, until recently senior vice president and
general counsel, was appointed president and chief executive.
Astrue, 46, a lawyer and executive who has played a major role in the biotech industry for nearly a
decade, had in November made public his plans to leave TKT. Last month, he stepped down as
general counsel.
The company also said that as part of planned changes that it would cut more than 20 percent of
the jobs at the firm.
The appointment, analysts said, is a significant step toward restoring the company's credibility.
Astrue is widely seen as an ideal choice at a time when TKT must overcome a series of regulatory
hurdles to get its business back on track.
''We still don't know exactly where the missteps were, but the Street's extreme negative perception
of what had taken place was looming over the company,'' said Jennifer Chao, an analyst with RBC
Capital Markets in New York. ''Unfortunately, it became necessary for Richard [Selden] to step
down.''
Last month, the company's prospects for bringing its drug Replagal to the US market were dashed
when a panel of specialists met to review its Food and Drug Administration application, raising
serious doubts among investors about how Selden had handled the regulatory process and how
forthcoming he had been with Wall Street.
A similar drug being developed by TKT's crosstown rival, Genzyme Corp., appears on track to be
approved this year.
In the past six months, shares in TKT have fallen nearly 90 percent, triggering a series of
class-action lawsuits. Yesterday, the shares closed at $4.32, up 52 cents. The news of Selden's
departure was announced after the market closed.
More than a year ago, Astrue had emerged as President Bush's choice to head the Food and Drug
Administration, but the nomination was blocked by Democratic Senator Edward M. Kennedy of
Massachusetts. Astrue was considered a candidate for another senior administration post.
Before joining TKT, he had played a key role as general counsel at Biogen Inc., one of the Bay
State's oldest and largest biotechnology firms.
Earlier in his career, he had served as associate counsel to two US presidents, advising and
representing Ronald Reagan and George H.W. Bush.
He also served as general counsel in the Department of Health and Human Services, where he
brought a federal case alleging discrimination by an employer against a person infected with the
AIDS virus. And he helped to expand the FDA's so-called fast-track process for approving drugs.
''Michael Astrue brings a wealth of experience, and on one of the most important issues facing the
company - its relationship with FDA,'' said Dennis Harp, an analyst with Deutsche Banc Alex.
Brown in New York. ''He has a long history of building strong relationships with the FDA.''
In an interview yesterday, Astrue said he has three priorities:
He wants to get Replagal, a drug to treat the rare genetic disorder Fabry disease, to as many
patients as possible, expanding its sales in Europe, where it is already approved, and continuing to
work with the FDA to get the drug OK'd in the United States.
He aims to push the company's drug to treat another rare inherited disorder, Hunter's disease, into
final clinical trials.
And he said he plans to restore financial discipline to the company, in part by eliminating about 100
jobs in coming months.
Astrue said the company, which has about 450 employees, has grown too quickly, given its
revenues. For the nine months ending Sept. 30, TKT generated $23,365 in revenues. The company
had more the $288 million in cash reserves, but is not yet profitable. It has yet to report
fourth-quarter and year-end results.
''We've been disappointing to investors; we've been disappointing to patients and our own
employees,'' Astrue said. ''We're going to do the best we can so we don't disappoint people going
forward.''
Naomi Aoki can be reached at naoki@globe.com.
This story ran on page C1 of the Boston Globe on 2/12/2003. |
