Arena CEO and Co-Founder Resigns at Request of the Board
October 6, 2015
By Mark Terry, BioSpace.com Breaking News Staff
San Diego-based Arena Pharmaceuticals announced today that its president and chief executive officer, Jack Lief, will retire, as well as stepping down from the company’s board of directors.
The announcement says that Lief’s retirement is “at the request of the Board of Directors.” His interim replacement will be Harry Hixson, a current board member. Hixson will be interim chief executive officer and interim principal financial officer. A search for a new chief executive will start immediately.
“Jack has contributed in many ways since co-founding Arena in 1997, including overseeing the approval and commercial launch of the company’s internally discovered and developed drug BELVIQ, and the development of a robust clinical stage pipeline and productive research platform,” said Hixson in a statement. “We thank Jack and wish him great success in his future endeavors.”
BELVIQ is a weight loss drug.
The company’s second quarter financial filing indicates that in the second quarter, the company’s net product sales were $4.285 million, up from the same period in 2014, reporting $3.529 million. However, total revenues were down from the second quarter 2014’s $12.801 million to 2015 second quarter’s $9.181 million.
This is primarily related to the company’s collaborative revenue with Eisai Inc.. In 2014’s second quarter, Eisai collaborative revenue was $8.554 million. In 2015, the same quarter, it was $3.213 million.
Eisai Inc. is the U.S. pharmaceutical subsidiary of Tokyo-based Eisai Col., Ltd. Eisai markets BELVIQ throughout much of the world. Eisai markets the drug in most of North and South America and worldwide, with the exception of South Korea, Taiwan, Australia, Israel and New Zealand.
Eisai has had its own troubles. In April the company announced it planned to lay off about 25 percent of its employees in the U.S. It employed about 1,800 people in the U.S. The company manufactures and markets prescription drugs and over-the-counter medications. In the company’s 2014 annual report, it cited downward pressure on drug prices and an emphasis on developing and maintaining intellectual property while requiring stricter compliance and higher transparency as part of the challenges it faces.
Arena , which has been on a decline since July, took a slight bounce on the news of Lief’s retirement. Stock traded at $6.05 on Jan. 13, 2015, then dropped to $4.04 on March 3, where it stayed fairly consistent until July 15, when it traded for $4.76. It then dropped significantly to $1.81 on Oct. 1. It is currently selling for $2.15 per share.
Lief co-founded the company in 1997 with Dominic Behan, who currently is Arena’s executive vice president and chief scientific officer. Lief, who turned 69 in March, was also acting as the company’s chief financial officer since July when Robert Hoffman left the company after 18 years.
According to regulatory filings, Lief will receive a cash severance of about $1.8 million, health insurance coverage for 18 months, and his stock options will be opened up.
Hixson was chairman of the board of San Diego-based Sequenom Inc. from 2009 to June 2014. He is currently 77 years old.