Chief Executive of Troubled Biotechnology Company Resigns

[antiquity]

Chief Executive of Troubled Biotechnology Company Resigns

By ANDREW POLLACK


he founder and chief executive of Transkaryotic Therapies, Richard F. Selden, resigned yesterday after setbacks in the company's drug development efforts. He will be succeeded by Michael J. Astrue, who until recently had been the company's general counsel.

The company did not offer a reason for Dr. Selden's departure but it seems tied to recent problems. "I think Rich went through a process where we had a difficult, discouraging and disappointing fall," Mr. Astrue said. "It's my understanding he went to the board and said it's time for new leadership."

Mr. Astrue said that Transkaryotic would cut 100 of its 450 employees in the next six weeks and that another 50 would be laid off by late in the year.

The company failed last month to win a recommendation from a Food and Drug Administration advisory panel for its drug, Replagal, to treat Fabry disease, a rare inherited disorder. The panel endorsed a rival drug made by the Genzyme Corporation, meaning that Genzyme's drug,
Fabrazyme, will probably win approval and have the market to itself for seven years under a federal law to encourage development of drugs for rare diseases.

Transkaryotic stock has fallen 90 percent in the last year. It dropped 62 percent on a single day in October when the company first announced that the staff of the drug agency did not agree with the data presented to win approval for Replagal.

The announcement took many investors and analysts by surprise and several lawsuits have since been filed by shareholders accusing management of misleading investors. Mr. Astrue said the company did not know of the agency's view until then.

A patent suit filed by Amgen blocked
Transkaryotic, based in Cambridge, Mass., from bringing to market its version of Amgen's anemia drug, Epogen, the biggest-selling product ever produced by the biotechnology industry.

Transkaryotic said its manufacturing method was different enough from Amgen's to avoid patent infringement, but the judge did not agree.
An appeals court last month asked the lower court to reconsider some facets of the case. But deliberations are likely to keep the drug off the market for many more months, even if Transkaryotic eventually wins.

Dr. Selden was an instructor in pediatrics at Harvard Medical School before starting the company in 1988. He stayed chief executive longer than most founders in the biotechnology industry, where scientific founders tend to give way to professional managers as the company grows. He could not immediately be reached for comment.

Mr. Astrue, 46, has had a career in the public and private sectors. In 2001, he was considered a candidate to become the commissioner of the Food and Drug Administration.

Mr. Astrue held several positions in the Department of Health and Human Services, including general counsel. He later became general counsel of Biogen, another biotechnology company. He became general counsel of Transkaryotic in May 2000 but left the company last month, he said, because he wanted to return to the public sector and because he did not agree with some of the company's direction.

"I think we were spread too thin," he said. "We've basically been spending in anticipation of revenue we're not going to be getting in the next couple of years."

Mr. Astrue said he agreed to return after talking to directors.

Mr. Astrue said the company would drop several programs, including gene therapy, and would concentrate on Replagal, which is being sold in Europe.

The shares rose 52 cents, to $4.32. The announcement of the management change was made after the market closed.

http://www.nytimes.com/2003/02/12/business/12BIOT.html