Arcturus Therapeutics (NASDAQ: ARCT) said today it has fired co-founder and CEO Joseph E. Payne (on the right in above photo), and named Mark Herber, vice president of business development and alliance management, as interim president.
The San Diego-based early stage biotech, which specializes in RNA medicines, did not explain in a statement today why the Arcturus board decided to terminate Payne—only that his dismissal “is not related to Arcturus’ operational performance, ongoing programs, financial condition, or financial reporting.”
The unexpected announcement nevertheless sent the price of Arcturus shares spiraling in after-hours trading, falling by $1.38, nearly 19 percent, to $5.93 a share.
Asked why Payne was terminated, Trevor Gibbons, a spokesman for the company in New York said, “We’re just not commenting beyond the release at this time.”
Payne is still listed on the company’s website as an Arcturus board member, though, and Gibbons confirmed that Payne remains on the board.
In a January 3 regulatory filing, Arcturus disclosed that it had completed its merger with Alcobra, an Israel-based biotech trading on the Nasdaq exchange, on November 15. As Payne explained the deal in October, Alcobra shareholders would own about 40 percent of the combined company while Arcturus shareholders will own about 60 percent.
Arcturus executive chairman Stuart Collinson voiced confidence in today’s statement in Herbert as “a seasoned biotechnology leader who has gained a deep understanding of our strategy, business and partnerships since joining the company in 2015.”
Payne, a scientist and pharmaceutical executive, was a senior manager in Oceanside, CA, with a subsidiary of the Japanese conglomerate Nitto Denko when he co-founded Arcturus in 2013 with Pad Chivukula, who is the startup’s chief operating officer and chief scientific officer. The subsidiary was established with an R&D focus that included drug delivery, gene delivery, and related technologies for nucleic acid synthesis.
Payne did not immediately respond to an e-mailed request for comment.
As a scientist, Payne worked previously at San Diego-based Kalypsys, Merck (NYSE: MRK), and DuPont Pharmaceuticals, and compiled a record of using sophisticated targeted RNAi nanoparticle technologies to usher new drugs into the clinic, according to his Linkedin profile.