Cellectar Biosciences today appointed a new president and CEO, the latest in a series of unexpected moves in recent weeks by the Madison, WI-based biotech company.
Seasoned drug and device industry executive Jim Caruso is taking over for Simon Pedder, who resigned his positions as Cellectar CEO, president, and board director. The 54-year-old Pedder, who led the company since October 2013, is retiring for personal family reasons, Cellectar (NASDAQ: CLRB) said in a press release. Caruso was also named to Cellectar’s board.
Caruso takes over after Cellectar restated its 2014 financial results and postponed its annual shareholder meeting to give investors an additional 12 days to review its amended annual report. The company is trying to commercialize cancer drugs and imaging agents that would be delivered to their targets by special compounds called phospholipid ethers.
In early May, Cellectar delayed the release of its first quarter financial results by nine days because it said it needed more time to assess the impact of a change in the way it accounted for warrants issued in an August public stock offering. Earlier financial results were restated to reflect the warrants as liabilities, but the corrections had no impact on the company’s cash position or operating results, Cellectar said.
Caruso’s hire pushed Cellectar’s stock price above $3 during today’s trading—the first time it surpassed that mark since early May. The company’s stock closed today at $2.96 per share, an increase of about 12 percent from yesterday’s close.
But Caruso will face some challenges early.
In its most recent quarterly earnings report, Cellectar said patient enrollment in its phase 2 clinical trial of one of its experimental cancer imaging agents, I-124-CLR1404, is going slower than anticipated. The company said it’s considering ways to incorporate existing data from separate researcher-sponsored studies, which could help Cellectar complete the company-sponsored trial more quickly. The company also said it has $7 million in cash—enough to fund operations through the end of the year—but it will need to secure additional capital to finish its current and planned clinical trials.
In addition, Cellectar announced last week that it is being required to submit a new application seeking approval of CLR1502, a tumor margin illumination agent, because the FDA determined the experimental product shares similar characteristics with indocyanine green, a fluorescent dye often used in medical diagnostics. The FDA decided CLR1502 should be evaluated as a product used in combination with commercially available fluorescent imaging devices, and assigned it to the Center for Devices and Radiological Health for approval.
Caruso’s “appointment comes at a critical time in the evolution and growth of Cellectar,” board chair Stephen Hill said in a press release. “He brings a level of energy and commitment, combined with his significant industry experience that I am confident will enable Cellectar to achieve the potential we all believe is inherent in its technology.”
The job marks a return to the Madison area for Caruso. The 56-year-old was a top sales executive for three years with Middleton-based Bone Care International, which was acquired by Genzyme in 2005 for $719 million. He has also held executive sales and operational roles with Novartis Pharmaceuticals and Allos Therapeutics, which was acquired by Spectrum Pharmaceuticals in 2012 for up to $206 million in cash. Most recently, Caruso was co-founder and chief operating officer of Florida-based medical device company Hip Innovation Technology for nearly five years.
Cellectar is Caruso’s first CEO job. His connection to the company is through Cellectar board member Paul Berns. Berns and Caruso worked together at both Allos and Bone Care International, companies formerly led by Berns.
Caruso declined to share details about the process of getting hired by Cellectar, but he said the timing was “aligned with Simon’s decision to retire and spend more time with his family.” After talking with Berns and learning more about Cellectar, Caruso was intrigued by the potential diagnostic and therapeutic applications of the company’s technology, he said.
“I believe it’s a hidden gem,” Caruso said of Cellectar. The company—founded in 2002 by University of Wisconsin-Madison radiology professor Jamey Weichert—is valued at $22.4 million, but Caruso believes “this technology is worth much, much more.”
Part of Caruso’s focus will be on “basic organizational blocking and tackling” and swift execution of the product commercialization strategy. Partnerships with other companies could be an option to help Cellectar move its products to market, he said.
When asked if raising additional funds will be a priority, Caruso said, “Obviously, anybody can take a look at our [profit and loss] and our run rate and cash position and kind of do the math. I think we have an opportunity as we move forward to more efficiently align strategic objectives with our financing and P&L management.”
Caruso said he spoke with Cellectar employees Monday evening. “Although there was disappointment obviously with the retirement of Simon, there was a lot of excitement about the future of the company and moving forward,” Caruso said. “An important part of my responsibility is to make their promise, their vision, a reality.”