Lion Bioscience last week announced a number of sudden changes in its upper ranks. Following a late-night supervisory board meeting on Wednesday, Daniel Keesman, COO and co-CEO, and Martin Hollenhorst, CFO and co-CEO, resigned. In addition, the company’s entire supervisory board — Jurgen Dormann, Klaus Pohle, and Richard Roy — also stepped down.
Lion spokesperson Tracy Coffey said that the timing of the resignations was related to the company’s directors and officers insurance, which was scheduled to expire on Friday. A new policy would have entailed much more expensive premiums due to the company’s planned delisting from Nasdaq, and Lion therefore decided not to extend the insurance, Coffey said.
Before stepping down, the supervisory board appointed Joseph Donahue and Thure Etzold as co-CEOs, replacing Keesman and Hollenhorst. Donahue will serve as chief business officer, retaining his current duties in that position, and will also assume responsibilities for finance and administration. Etzold, developer of Lion’s flagship SRS technology and most recently senior vice president of R&D and managing director of Lion’s UK subsidiary, has been named chief technology officer, responsible for product development and services.
Coffey said that Friedrich von Bohlen, who resigned as CEO in January [BioInform 12-22-03] and remains the company’s majority shareholder, was consulted about the changes and “supports the process.” A new supervisory board is expected to be appointed within the next few weeks. Company officials were not able to provide information on who is being considered, but did confirm the possibility that von Bohlen may take a position on the supervisory board.
Von Bohlen could not be reached for comment.
The company is also looking into a less-costly new directors and officers insurance policy to ensure coverage for Donahue and Etzold, Coffey said. The new board would not have to be insured, however.
Etzold and Donahue said that there are no further staff changes planned as part of the management reorganization, and that Lion’s product-development plans will remain unchanged (see story, p. 5).
Etzold said that the news of the executive- and supervisory-level changes came as a surprise to everyone at Lion. “This is a shock, and has been a shock to everybody, but I’m confident that this has been a brief moment of shock, and people are already looking to the future,” he told BioInform.
The suddenness of the changes at the top of the company’s management structure caps a tumultuous couple of years for Lion, which went public with a €208 million IPO in 2000, reached a height of nearly 600 employees in 2002, and then suffered a series of setbacks that forced it to steadily reduce its staff to its current level of 150. The company also recently began considering whether to delist its shares from the Nasdaq exchange, where the stock has slid from nearly $6 per share last September to $1.36 last Friday [BioInform 06-28-04].
“We’ve gone through a lot of changes over the years, and probably some people are thinking there are dramatic changes happening here, but we’ve shown some real progress over the last 12 months,” Donahue told BioInform. “At this point, [Etzold] and myself are absolutely committed to continuing down that path, but at the same time, we still need to continue to listen to what our customers are telling us, and we’re always looking at the operation — much like you would with your own investment portfolio — how can you streamline it and make it better and more efficient?”
While things are “in flux” until a new supervisory board is named, Donahue said that “from a corporate structure standpoint ... the fact that the management board and the supervisory board stepped down doesn’t change a whole heck of a lot from my standpoint — we still work for the shareholders.”
Donahue said that he and Etzold are “evaluating” the company’s Nasdaq delisting strategy. “We’ve got an outlined strategy and some documents internally that we’re in the process of reviewing to decide what we want to do.”
Donahue said that the top-level resignations were not related to any unexpected changes in the company’s financial performance, and that Lion’s revenues and costs for its second fiscal quarter, which closed on Sept. 30 and are scheduled to be announced on Nov. 4, are in line with expectations. The company has projected revenues of €12 million ($15 million) for its fiscal year.
Lion had cash and cash equivalents of €39 million ($49 million) as of June 30, and has projected liquid assets of more than €30 million at the end of its current fiscal year, which closes March 30, 2005.