This story has been updated from a previous version.
NEW YORK, March 21 - The decision to promote Ted Love to the position of CEO at Hyseq reflects George Rathmann's confidence in Love's ability to get the company back on track, a spokeswoman said Wednesday.
"George feels Ted is extremely capable," said Dawn Nakao, Hyseq's investor relations manager.
In February 2000, Rathmann, 73, was brought in as chairman of the board and in May he stepped in as CEO in order to help reinvigorate the beleaguered company.
Nakao noted, however, that Rathmann, who will remain chairman of the board, never planned to stay at the helm for an extended period of time.
“The idea was never that George would be here for the next 10 years as CEO,” Nakao said. “Last May George became CEO because the current CEO was not running the company as George would have liked.”
A few months ago, Rathmann, hired Love as chief operating officer. At the time, Rathmann also turned over the reins of president to Love.
“Ted is such an energetic person and he is incredibly smart,” Nakao said.
Hyseq said hiring Love, 42, also reflected the fact that the company was gearing up to prepare for clinical trials for a number of its products. Previously, Love was senior vice president of development at Advanced Medicine. He also worked in clinical research, product development, and regulatory affairs at Genentech.
Hyseq, which has focused on selecting biopharmaceutical candidates from our thousands of full- length genes during the past year, expects to move drug candidates into clinical trials in the first quarter of 2002, Nakao said.
She noted that the company was also in the process of considering seeking a new partner with whom to commercialize its biochip technology. A 1997 deal with Applied Biosystems to commercialize the biochips has not yet resulted in any commercial product.
“The talks with Applied Biosystems have been ongoing for quite a while. They’re on track, off track – it’s hard to hook up,” Nakao said.
Although Rathmann might now be less involved in the day-to-day running of Hyseq, Nakao said he would still play an active role in trying to sort out the company’s finances.
In February, Rathmann, a biotech guru who had stunning success as the founder of ICOS and Amgen, said he would extend the company a $20 million line of credit in order to pad the company’s cash reserves which had dwindled to just $2.7 million.
On Wednesday, Hyseq also said that it would draw down the entire $20 million, adding that it would pay off the balance of the loan in shares of Hyseq common stock.
However, Rathmann himself noted that even with the loan the company would not have enough money to get through 12 months. Nakao said that Rathmann would seek new financing for the company either through a secondary offering or through a round of pipe financing.
“With George’s connections he will be a key figure in doing that,” Nakao said.
Noting the poor market conditions, Nakao said that the company was not currently in any negotiations for fresh funding.