AVI BioPharma Says Burger Resigns as Chief Executive (Update3)
By Luke Timmerman
March 28 (Bloomberg) -- AVI BioPharma Inc. said Denis R. Burger is resigning immediately as chairman, chief executive officer and board member of the biotechnology company after a shareholder group demanded his ouster.
K. Michael Forrest, an independent director, was named interim chief executive officer, the Portland, Oregon, company said today. Jack L. Bowman, the board's lead independent director, was named chairman.
Burger, 63, is leaving the company and cutting all ties under a ``mutual agreement'' with its board, said company spokesman Michael Hubbard. A group called the AVI BioPharma Shareholder Advocacy Trust, led by New York analyst Richard Macary, pressed for Burger's ouster, saying he lacked credibility.
``We instigated this process, and we put the board in position to make this decision,'' Macary said in a telephone interview. ``We believe this will allow the company to get to the next level.''
The shareholder group, formed in October, represents mostly small shareholders who together have about 20 percent of the company's stock, according to Macary. Burger failed to deliver on drug development deadlines, undermining the company's reputation on Wall Street, Macary said.
Burger's Response
Some of the criticism from shareholders is valid, said Burger, who became chief executive in 1996 after serving as president since 1992.
``I was asked to step down, and it's not something I disagree with,'' Burger said in a telephone interview. ``I've been the right person for AVI for 15 years to get the company to this stage, and now the board is looking for someone with more pharmaceutical experience and interest to take the lead.''
The next CEO ``will look like a star, because the company is well set up,'' Burger said. He predicted the company will sign a partnership with a pharmaceutical company, and could have products to sell in two to three years.
Shares in the company fell 3 cents to $2.42 at 1:53 p.m. New York time in Nasdaq Stock Market composite trading. The shares have fallen 62 percent in the last 12 months.
AVI, which has no marketed products, is developing drugs based on antisense technology, designed to shut down disease processes at the genetic level. Its drug against Hepatitis C infection failed to show effectiveness, the company said in October.
Military Contracts
The company has research contracts with the U.S. military to develop drugs against deadly infectious agents such as anthrax and the Ebola and Marburg viruses, Macary said. The company also has research against avian flu, and a partnership with Cook Group Inc. on technology for drug-coated stents.
AVI has a market value of $130 million compared with Isis Pharmaceuticals Inc.'s almost $800 million even though AVI has superior technology, said Macary. That's because Burger lost credibility with Wall Street, making it difficult to raise money for clinical trials, Macary said. |
