Biotech Values

[DewDiligence]

Genmab Cans Lisa Drakeman

[This is a shocking dénouement given the blockbuster partnership with GSK Drakeman negotiated 3.5 years ago (#msg-15652707). CC today at 10am EDT.]

http://www.reuters.com/article/idCNLDE65E0PV20100615

›Tue Jun 15, 2010 6:12am EDT
By Peter Levring

COPENHAGEN, June 15 (Reuters) - The chief executive of Genmab (GEN.CO) stepped down on Tuesday following criticism of recent mis-steps at the Danish biotechnology company, whose shares have fallen more than 80 percent in the past three years.

Dutchman Jan van de Winkel, the company's chief scientific officer since its inception, will replace American Lisa Drakeman as CEO with immediate effect, the company said.

Genmab was for many years a rising star of the European biotech sector, thanks to the successful development of its Arzerra medicine for blood cancers and a multibillion-dollar licensing deal for the drug with GlaxoSmithKline (GSK).

But more recently, clinical trial results have disappointed and the company has twice had to make significant cost cuts. It also decided last year to sell a U.S. drugmaking facility, marking an embarrassing reversal of a less than two-year-old strategy to secure its own manufacturing capacity.

The company's problems have led to persistent speculation that Glaxo might buy it to get full rights to Arzerra. But many analysts are sceptical.

"To me Drakeman's exit shows a GSK takeover of Genmab is not imminent. If it had been just around the corner she would have seen it through. It would have left her with a better reputation," said Sydbank analyst Rune Dahl.

A spokeswoman for Glaxo declined to comment.

Shares in Genmab had risen sharply on Monday following a bullish analysis in a newsletter that highlighted talk of a Glaxo takeover, as well as positive results for candidate drug zalutumumab.

Genmab shares, which last Thursday hit their lowest level since mid-2003, were up 3 percent to 60 crowns by 0945 GMT.

Glaxo bought global rights to Arzerra in December 2006 in a deal worth up to $2.1 billion, a record sum for a biotech product agreement at the time [#msg-15652707].

Genmab said it would hold a conference call to discuss the management changes at 1400 GMT. The timing will allow participation of the company's American chairman, Michael Widmer, who is based on the U.S. West Coast.‹