After only 10 months at the Axovant Sciences helm, CEO and director David Hung is stepping aside. Joining him through the exit door are Marion McCourt, chief operating officer, and board members Kate Falberg, Patrick Machado, and Tony Vernon. Hung will remain as a scientific advisor.
Hung oversaw one of the most embarrassing missteps in a bad few months for Axovant. The company reported in early January 2018 that it’s Parkinson’s/Lewy body dementia candidate nelotanserin significantly improved Parkinson’s symptom scores, but the claim was a big whoops. The reported significance value was a “transcription error,” and Axovant issued a correction the next day: the effect was emphatically not significant.
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The error almost buried the other negative news in that basket of goose eggs for Axovant, the termination of its intepirdine program after the drug failed to meet its primary endpoint in phase 2 trials.
Coming in the revolving door are new CEO Pavan Cheruvu, from the executive team of Roivant Sciences, Axovant’s parent company, and new board members Roger Jeffs, former United Therapeutics CEO, and George Bickerstaff, former CFO of Novartis Pharma.
On a 12 February conference call with analysts, Cheruvu made clear that his first order of business is housekeeping, including cleaning most of the drawing board. The plan, he said, is to “reduce nonessential expenses so as to preserve our strong cash position.” That position is $188 million as of December 31, 2017, Cheruvu said.
About the fate of the current pipeline, Cheruvu said that the company will provide a mid-year update after a comprehensive review. The company reported in June 2017 that the FDA had given nelotanserin Fast Track designation for treating visual hallucinations in Lewy body dementia.
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Cheruvu said that in addition to running “an extremely lean and entrepreneurial organization,” the company also will be looking at possible additions to the pipeline, going beyond neurodegenerative diseases. “We are taking an expansive view of business development,” he said, and plan to explore areas including neuroinflammation, neuropsychiatry, and neuromuscular disorders. “While we will not shy away from taking bold risks for the benefit of patients, we understand the need to build a diversified pipeline,” he said.
The $188 million bank account has shriveled since the company’s near $300 million balance sheet at the end of June 2017. As of this writing, $AXON shares were down almost 22 percent, reducing the market cap to $161 million.
Hung joined Axovant from Medivation, the company Hung founded in 2003. He stepped into the role after Axovant founder Vivek Ramaswamy shifted priorities to Roivant, the parent company Ramaswamy also founded.
In an understatement, Ramaswamy said on the conference call that the hope had been that “Axovant would be rapidly approaching commercialization in 2018.” Instead, a few short months after he turned over the reins in April 2017, the company’s pipeline collapsed, with failures of its lead candidate Alzheimer’s drug, intepirdine, added to a series of dashed hopes in the neurodegenerative therapeutic area, including negative results for Lundbeck’s idalopirdine for mild-moderate Alzheimer’s.
Ramaswamy was careful not to throw Hung under the bus, saying, “I expect great things from David … and I look forward to working with him as an advisor.”
With a nod to the choice of Cheruvu, Roivant’s former chief people officer, for Axovant’s driver’s seat, Ramaswamy said, “This is by no means a conventional decision, but we do believe that it is the right decision for the long run.”
