The San Diego RNA drug developer Arcturus Therapeutics (NASDAQ: ARCT) on Thursday reinstated fired CEO Joseph Payne and named ResMed (NYSE: RMD) founder Peter Farrell as chairman of the company’s new board of directors.
The four members of the company’s previous board, who resigned as part of an agreement reached last weekend, fired Payne in January, alleging in a lawsuit that he had misled them to advance his personal interests.
Payne’s dismissal triggered a power struggle. He co-founded Arcturus and is the company’s largest shareholder, with a 13.7 percent stake. Payne mounted a proxy challenge that asked shareholders to replace the incumbent board with four directors he had recruited. The replacement board included Farrell, who is the founding CEO and current chairman of ResMed, the San Diego-based maker of sleep apnea breathing machines.
A showdown was set for a shareholder’s meeting on June 25th, but Payne apparently held the upper hand. In a March 27 lawsuit that Arcturus filed against Payne, the company (under the control of the previous board) disclosed that a group of shareholders allied with Payne controlled almost half of the votes cast in a February 26 shareholder meeting. As a voting bloc, the Payne group seemed likely to also control the outcome of the proxy fight at the June 25 shareholder meeting.
In addition to appointing Payne’s candidates for the replacement board, the agreement reached over the weekend also settled litigation between the warring sides. Payne’s return seemed likely when the settlement was disclosed, but it wasn’t confirmed until Thursday.
A brief statement from the company quotes Payne as saying he’s “extremely pleased” to be reinstated at Arcturus. “With the litigation behind us, the team is 100 percent committed to developing our pipeline of novel RNA therapeutics, to strengthening and advancing all of our pharmaceutical partnerships, and to creating value for our shareholders,” he said.
Arcturus also reinstated Padmanabh “Pad” Chivukula as its chief scientific officer and chief operating officer. He resigned from the company after Payne was fired. Payne and Chivukula founded Arcturus in 2013 to advance a new approach to the development of RNA drugs for infectious disease, cystic fibrosis, nonalcoholic steatohepatitis (NASH), and rare liver diseases.
In response to a question from Xconomy about the previously scheduled shareholder meeting set for June 25, a spokesman for the company said earlier this week that the new board “will be meeting and issuing an official update to the market in due course.”