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The surprise announcement by Dr Michael Thurn to resign as CEO of PharmAust (ASX: PAA) last month, less than a year into the role, has been followed by a mass exodus from the Perth-based clinical-stage biotech’s board announced today.
Dr Roger Aston and Robert Bishop, co-founders of Pitney Pharmaceuticals which was acquired by PharmAust in 2013, have both resigned from the board effective immediately.
They were joined by newly anointed executive director Dr Thomas Duthy, who only joined the PharmAust board in February as part of a “strategic appointment” to enhance the board’s governance and business development acumen.
News of the departures pushed PharmAust shares 18 per cent lower to 18c in early trading following a two-day trading halt. The shares were down 3c to 19c at 11.45am (AEST).
The resignations have been amplified by Aston's role as long-time chairman of PharmAust since 2013, as he and Bishop joined the board following the Pitney acquisition.
Aston, who was the company’s executive chairman until the appointment of Duthy last year, is also the inventor of many of PharmAust’s existing and pending patents for monepantel for both veterinary and human use.
A former CEO of Mayne Pharma Group (ASX: MYX), Aston has extensive experience in the pharmaceuticals sector from startups to corporate majors.
Neither he nor Bishop have given reasons for their exit from PharmAust, but in a statement on behalf of the departing directors, Aston says they are “thankful for the opportunity to serve PharmAust”.
“We’re passionate about the prospects of monepantel in difficult to treat neurological disorders like MND/ALS (motor neurone disease) and wish the company every success with John Clark as the managing director going forward,” Aston says.
Clark, PharmAust’s former chief operating officer, was named interim CEO following Thurn’s resignation on 23 April for personal reasons. Today the company announced Clark as Thurn's permanent replacement.
Thurn was only appointed to head the company in August last year, replacing Aston as executive chairman. PharmAust has named finance director Sam Wright as interim chairman to replace Aston.
Marcus Hughes, one of PharmAust’s largest shareholders, also has been appointed non-executive director to fill some of the void left by the board exodus.
PharmAust says Hughes brings more than 20 years’ experience with listed companies, including senior managerial, tax and finance roles with Lendlease (ASX: LLC), Fortescue Metals (ASX: FMG) and Rio Tinto (ASX: RTO).
“We’ve made new additions to the board of directors with the drive, requisite experience and skill set that will allow for the continued development and success of PharmAust and monepantel at this pivotal stage of the company,” says Wright.
“We’ll continue to strengthen the management team around John. I want to thank each of the outgoing directors for their service to PharmAust, some of them over the course of many years, and wish them all the best in their future endeavours.”
Wright says the company and shareholders “particularly owe a deep debt of gratitude” to Aston and Bishop.
“It's been both an honour and a pleasure to work alongside these gentlemen for almost a decade,” he says.
“Roger steered the company through diverse challenges with limited funds and left PharmAust much better off than when he joined.
“Robert's guiding principle was to always put shareholder interests first and do the very best we could with whatever hand we held.”
PharmAust is planning an investor webinar soon to outline “the pathway and next steps for the company”.
In its latest update for the March quarter, PharmAust announced that it had secured manufacturing process development agreements with Syngene International and Catalent Pharma Solutions to begin validation and registration batches of monepantel at scale to support regulatory approval and commercialisation.
PharmAust's veterinary program, which is approaching the commercialisation phase, is aimed at treating cancer in pet dogs. The company’s lead molecule in this treatment is monepantel, an existing veterinary drug already in wide use as an anti-parasitic with key patents owned by Elanco due to expire in major global markets in 2024 and 2025.
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