Replies to post #161039 on Biotech Values

[DewDiligence]

John Varian, the CEO of XOMA was the CFO or ARYX. You weren't a fan of that company or management.

Actually, my main concern about John Varian is not that he was CFO at ARYX, but rather that he was a finance executive at ELN from Oct 1998 to Apr 2000. As everyone learned in 2002 (thanks to a cover story in the WSJ), ELN was cooking the books by moving money between JV’s, off-balance-sheet vehicles, and the parent company to exaggerate revenue and profit.

Did Varian participate in the crooked accounting at ELN? He might have, although his departure in early 2000 makes it hard to tell. It’s also conceivable that Varian left ELN in early 2000 because of the crooked accounting.

Regarding ARYX, my criticism was directed to the Tecarfarin program, specifically. I thought the program was just plain stupid, and I told you so in #msg-36775724. (You replied by calling me a blind man, but the program ended up failing.) During the latter part of Varian’s tenure with ARYX (from 2006-2011), he was the CFO, so he probably doesn’t deserve a major portion of the blame for the company’s bad clinical decisions.

All told, I would say that Varian’s track record before landing at XOMA is more of a negative than a positive. However, I don’t have to like every last detail about a company in order to invest.