You breach your company's code of conduct, you're out of the CEO's chair--at least, if you're Lundbeck CEO Ulf Wiinberg. The Danish drugmaker's chief is packing his bags after failing to follow procedures on stock ownership.
According to the company, Wiinberg accepted shares of Stratified Medical from its founder last year without permission, violating the company's internal policies. And it's an "aggravating circumstance" that Lundbeck later invested around 19 million Danish kronor ($3.2 million) in the biotech, it said.
Wiinberg, who will walk away with a 19 million kronor severance payment, called the events "unintentional," and he apologized to Lundbeck Chairman Håkan Björklund before stepping down voluntarily. Still, "this does not change the fact that Lundbeck has a clear and unmistakable Code of Conduct for all employees," Björklund said in a statement. "We cannot operate with degrees of compliance with our code of conduct and the board of directors therefore concurs" with Wiinberg's decision to resign.
It's a less than ideal time for the Danish company to lose its helmsman--especially one with a successful track record of bringing new drugs to market, Sydbank analyst Soren Lontoft told Reuters. Lundbeck is still working to fill in for declining patent-cliff revenues from products like blockbuster antidepressant Lexapro. With the company expecting upcoming approvals and launches for new products within the next couple years, "the timing is really bad for Lundbeck," he said.
Currently, the company is in the process of launching Selincro, an alcohol addition drug, around Europe. Lundbeck began rolling out the drug last year in heavy-drinking countries like Norway, Finland, Poland and the Baltics, estimating that 14 million people on the continent are afflicted by alcohol addition--and less than 10% receive treatment. In May, it picked up Chelsea Therapeutics--maker of an FDA-approved med to treat side effects of neurological disorders, Northera--with an eye on revving up a bungled launch. "Lundbeck's expertise in commercializing rare disorder CNS products will enable a rapid and successful launch of Northera into the U.S. market," Chelsea's CEO said at the time.Lundbeck Chairman Håkan Björklund
But Lundbeck will just have to soldier on without Wiinberg's guidance, and it said it would begin the search for his replacement "immediately." Björklund said on a conference call that Lundbeck would consider both external and internal candidates with international experience, Bloomberg reports, and the company expects to have a new skipper installed by August. Until then, Björklund himself will be running the show as day-to-day leader of the company, Lundbeck said.