Headline... San Diego Union .."FIRED LIDAK CEO VOWS COMEBACK"
"Lidak Pharmaceuticals said yesterday that it fired chief executive David Katz, less than 24 hours after he blasted the compnay's board for failing to close a controversial financing deal. Katz, who led the company since its founding in 1988, attributed
his dismissal to a "diabolical plot" at the San Diego biotech and promised a fight to regain control. "I am not going to let the
shareholders or the good people around me suffer for the malevolent deeds of a few, Katz said. "Lidak is my lifeblood, and I am not
finished with Lidak in any way, shape or form." Lidak's board acted Wednesday night, just hours after Katz issued a three-page news
release that sided with a little-known investment group that wanted the board to resign as a condition of a substantial loan. But
Lidak chief financial officer Jeffery B> Weinress said the factors behind Kat's ouster went further back than that, including
the loss last year of an important partnership with Bristol-Myers Squibb. "Much more was involved than simply that press release
the other day," Weinress said. "I don't think it was a knee-jerk reaction." The ugly separation was the latest of many strange
turns for Katz, whose previous tenure as head of another local biotech, Quidel Inc., included an employee's attempt to poison him.
At Lidak, Katz put up $1 million in the early 90s to bail out the company when it ran low on cash. So closely linked was he to
Lidak that the company's name is an acronym for the names of his daughters. He remains the company's largest shareholder. "It just
goies to show: Don't put yourself up against the board,"said Bud Leedom, editor of the San Diego Stock Report. "I don't know what
his plans are going foward. This is kind of tough to make a comeback from." The new president and chief executive of Lidak is
Gerald J> Yakatan, who has worked at several local biotechs over the past decade and landed at Lidak in 1995 as vice president
of drug development. Yakatan wan appointment to Lidak's board just last week. Board Chairman William N. Jenkins told Bloomberg
News through a spokesman that Katz's criticism of the board had been "totally inappropriate" but did not elaborate on the
thinking behind the change. In his his statement Wednesday, Katz said he was "heartbroken" that the board's "delaying tactics" had
cost Lidak a deal with Beverly Hills based HealthMed Inc., which broke off negotiations this week.
"We recongnize and appreciate Dr. Katz's contributions, "jenkins said in a release. "The board of directors believes, however, that a
change in executive management is necessary at this time." Katz did not say how he plans to regain control of the company,
but he said he had an inkling a few weeks ago of a plot to oust him. Lidak said he would retain his board seat. It was Katz who
presented the board with the HealthMed proposal, which involved an unorthodox loan of up to $130 million in exchange for control
of the company. Lidak's oral herpes drug Lidakol is up for U.S. Food and Drug Administration approval, but without
Bristol-Myers'backing the company needs either cash or a new partner. But HealthMed, less than a year old, has such a low profile that some initially confused it with an
alleged Church of Scientology group that used the same name. Katz nonetheless sold the group about a third of his roughly 1 million
Lidak shares. HealthMed said last week it has voting control over 5.5 percent of Lidak stock, including Katz's stake. Lidak
shares, which have fluctuated since that deal emerged Jan. 10, closed yesterday at $1.75, down 61/4 cents." by Thomas Kupper, Staff Writer
OOOOOUUUUUUIIIIIIIIIOOOOOOO!!!!!!!!! hello! out there..... this is nuts.... hard to keep that open mind....
luis |
