QLT's workforce cut, CEO quits after shareholder coup
TORONTO (Reuters) - Charting a new course after a boardroom coup, Canadian biotech company QLT Inc outlined plans on Monday to cut 68 percent of its workforce and find a new chief executive.
The company's new board, elected following a proxy battle in June, plans to sell or spin off parts of the company, return $100 million in capital to shareholders and focus on developing a treatment for several eye diseases that can cause blindness.
The new board is controlled by activist investors who took charge of the flailing company after the success of the proxy campaign spearheaded by Danish investment fund NB Public Equity Komplementar ApS.
"Our board was elected by concerned and frustrated shareholders, disquieted that the company's spending and headcount seemed inappropriate given the nature of its assets, size and focus," QLT Chairman Jason Aryeh said in a letter to shareholders.
"We believe that it is critical that a change in QLT's direction be implemented to prevent further erosion of QLT's value and assets."
The Vancouver-based company, which also revised its earnings forecast, said several senior executives would leave, including long-time Chief Executive Robert Butchofsky.
It said Butchofsky has agreed to stay in his job until July 31, or until the board names a new CEO. QLT said it is currently evaluating several candidates for the post.
QLT, a strong performer in the early 2000s on sales of its Visudyne treatment for age-related blindness, lost market share following entry of rival products such as Novartis AG's Lucentis.
It will now focus on developing QLT091001, a treatment for several inherited eye diseases that can cause blindness. European and U.S. regulators have given the compound orphan drug status, a status that makes it easier for treatments for rare diseases to win regulatory approval. Continued...