By Ben Butkus
WaferGen Biosystem's Alnoor Shivji has resigned from his role as president and CEO of the company, which is considering as a replacement former Helicos Biosciences executive Steve Lombardi, according to a document filed this week with this US Securities and Exchange Commission.
The move is intended to enhance commercialization efforts surrounding WaferGen's year-old Smart-Chip Real-Time PCR system, according to company executives.
According to the SEC filing, Shivji resigned effective Oct. 19, and will continue in his role as chairman of WaferGen's board. The company also said that it has formed an office of the president, comprising current COO Mona Chadha and CFO Donald Huffman, to perform the duties of principal executive until a permanent replacement CEO is appointed.
Huffman and Chadha, who also serves as WaferGen's executive vice president of marketing and business development, will continue to perform the individual duties and responsibilities associated with their current positions, WaferGen said.
WaferGen also said in its SEC filing that it has entered into a consulting agreement with Steve Lombardi, former president and director of Helicos Biosciences, wherein Lombardi will assist WaferGen's office of the president with "strategic and other company objectives" as the company considers him for the role of CEO.
Under the agreement, if the WaferGen board approves Lombardi's appointment as CEO, and Lombardi accepts the appointment on or before the end of this year, he will be entitled to receive either $250,000 in cash or 1 million shares of the company's stock, in addition to any payments he will receive as a consultant.
The company's stock closed trading today at $.29 per share.
"Alnoor has been able to successfully get the company to this point — early commercialization," Huffman told PCR Insider. "He is a successful serial entrepreneur, and he has good judgment about when it's time to turn over the reins to someone else.
"At this juncture, [Shivji] … and the board felt that it was the right time to bring in a leader with very specific domain knowledge, and Steve Lombardi certainly qualifies there with 30-plus years of experience in this industry," Huffman added.
Lombardi resigned as president and director of Helicos in February 2010. He joined the company in 2006 as senior vice president of sales and marketing and became president and COO in 2007; and also served as CEO for several months.
Prior to joining Helicos, Lombardi was a senior vice president at Affymetrix. He also held various positions at Applied Biosystems, including president of the Life Tech subsidiary's sequencing and genetic analysis business unit.
Chadha joined WaferGen in 2006 as vice president of marketing and business development and was promoted to COO and executive vice president in February 2010. Huffman has served as the company's CFO since September 2010.
WaferGen also disclosed in its SEC filing that it has entered into a consulting agreement with Shivji, under which he will provide "transition and other advisory" services. Shivji will also receive severance in the amount of $262,500 over the next year, the company said.
The management shakeup marks a crossroads of sorts for WaferGen, which last August launched its flagship SmartChip real-time PCR system after prepping it for market for several years (PCR Insider, 8/5/2011). The system comprises a nanodispenser module; 5,184-well consumable chips preloaded with target-specific primers; and the SmartChip cycler, which performs PCR thermal cycling, data collection, and amplicon melting.
The company has also developed various specific gene-profiling panels for sale with the system; and offers contract, custom gene expression analysis research services out of its Fremont, Calif., headquarters.
However, WaferGen, which racked up significant debt prepping the SmartChip system for commercial launch, has been struggling to make ends meet, as evidenced by its second-quarter financial results, released in September (PCR Insider, 9/15/2011).
For the three months ended June 30, WaferGen reported a nearly 10-fold year-over-year decline in Q2 revenues due to what it called a "lack of SmartChip platform sales." The company also posted a net loss of $9.2 million in the second quarter compared to a profit of $724,000 in the prior-year period.
Chadha told PCR Insider today that WaferGen has been targeting both the academic research and pharmaceutical markets for its product line, but thus far has mostly penetrated only the former.
The company continues to develop additional applications on the SmartChip platform, she said, and is "further refining [our strategy] by targeting the next-generation sequencing validation market, as well as the pure validation that comes from microarrays."
In May, WaferGen announced plans for a $30.4 million private placement financing of equity and debt in order to ramp up sales and marketing around the SmartChip system (PCR Insider, 5/26/11).
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