Galena Biopharma ($GALE) announced a new CEO last week. The outgoing chief, Mark Ahn, was said to be leaving to pursue "other long-held personal and professional goals." That's an obvious red flag: Ahn must have been not-so-gently reminded that he had other long-held goals.
Now, as TheStreet reports, Galena has posted a new disclosure with the Securities and Exchange Commission about Ahn's departure. It shows that the ex-CEO isn't getting any severance pay. His unvested options won't vest early. And when a company chief departs without severance, that's a telltale sign: It wasn't a friendly firing.
Galena is a small drugmaker with two marketed products to treat the side effects of cancer treatment, Zuplenz for nausea and Abstral for pain. The company bought rights to Zuplenz just last month, and Abstral last March. Its current claim to fame--the reason why it has a social-media following--is NeuVax, a prospective immunotherapy in Phase III testing for breast cancer. With immuno-oncology hogging the cancer-treatment spotlight, immunotherapies are some of the most closely watched candidates out there.
So where did Ahn run aground? According to TheStreet, Galena's board of directors had been investigating the company's investor relations firm, The DreamTeam Group, which has engaged in some questionable promotional tactics. Over the summer, Galena's stock soared. Ahn and some other insiders sold shares.
Galena investors of all stripes might have chosen to sell out and collect some profits after the stock's rise. That its executives did the same might be totally on the up-and-up. But in any case, the SEC is investigating Galena and its DreamTeam relationship, the company has said. As questions arose, the board launched its own investigation--and the company appointed a former SEC enforcement attorney to join those directors.
Not the sort of thing a company wants to announce in a press release (though it did disclose the probes to investors in an SEC filing). Now, Ahn's replacement, Mark Schwartz, has to manage the aftermath, step up marketing and sales for that newly licensed drug, Zuplenz, and keep that immunotherapy moving. Did we mention the lawsuits filed by shareholders--or Galena's own libel suit against the co-developer of its cancer vaccine? Meanwhile, Ahn himself says (as quoted by TheStreet) that he's "looking forward to the new adventure."
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