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CEO Resigns at San Diego Biotech Firm

Posted on: Thursday, 16 March 2006, 15:00 CST

By Craig D. Rose, The San Diego Union-Tribune

Mar. 16--La Jolla Pharmaceutical Co., which less than a year ago paid retention bonuses to retain top executives, said yesterday that its longtime chief executive has resigned.

The San Diego biotechnology company said Steven Engle, who had headed the company since 1993, has been replaced as CEO by Dr. Deidre Gillespie, who most recently headed Oxxon Therapeutics, a British company. La Jolla also said it named Dr. Craig Smith, an independent director, to replace Engle as chairman.

Efforts to reach Engle were not successful, and La Jolla declined to discuss the reason for his departure.

The company is struggling to win approval for Riquent, a proposed treatment for lupus. Late last year, La Jolla raised $63 million through a private placement of shares and predicted that the funding would suffice for two years.

In an interview yesterday, Smith thanked Engle for years of service to the company through "thick and thin" and said that Gillespie has had a mix of experience in pharmaceutical development that would serve La Jolla well.

At Oxxon, a privately held company, she oversaw the successful completion of Phase 2 trials for two drugs. Pharmaceuticals typically require three successful phases of trials before they can win approval by regulators.

Gillespie earlier was chief operating officer of Vical, a San Diego biotechnology company, and also worked at DuPont Merck Pharmaceutical Company and at Sandoz.

"She can provide the leadership for the company going forward that will allow us to complete the clinical trial the Food and Drug Administration has asked us to carry out," Smith said.

La Jolla plans to complete by next year the enrollment of about 600 patients in what it hopes will be the final phase of testing for Riquent. Smith said clinical data from that Phase 3 trial would be available in 2008.

The drug failed to prove efficacy in a 1999 test and in 2003 again failed to prove effective in delaying episodes of kidney inflammation resulting from lupus.

But La Jolla then asked the FDA to consider approving Riquent for its ability to reduce certain antibodies. The federal drug regulator said that was possible only if the company successfully completed a new clinical trial, which it is now undertaking.

Pacific Growth Equities, a San Francisco firm, said it retains a neutral rating on La Jolla's shares.

In a recent research report, Pacific Growth analyst Liana Moussatos said it was likely that the biotechnology company had funding sufficient to last it through 2007 and two planned interim analyses of its clinical data.

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Copyright (c) 2006, The San Diego Union-Tribune

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LJPC,

Source: The San Diego Union-Tribune

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