Navidea Shakeup Continues as CEO Rick Gonzalez is Now Out

Navidea Shakeup Continues as CEO Rick Gonzalez is Now Out May 18, 2016
By Alex Keown, BioSpace.com Breaking News Staff

DUBLIN, Ohio – One week after a director and the company’s accounting firm resigned from Navidea Biopharmaceuticals , the shakeup continues, this time as the company’s chief executive officer, Rick Gonzales, is now gone from the company.

Jed Latkin, who was named interim chief operating officer in April, will lead the company until a new CEO is tapped, Navidea said in its first quarter earnings statement released Tuesday.

There is some disagreement over whether or not Gonzales’ departure was voluntary, Columbus Business First reported. According to a May 13 filing with the U.S. Securities and Exchange Commission, Gonzales claimed he was terminated, while Navidea states he resigned. According to the filing, Navidea maintains Gonzales’s refusal to take on additional responsibilities assigned by the board of directors constituted an “effective resignation.” He and the company are not done though, as they will square off in arbitration over whether or not he is entitled to additional compensation due to an increase in sales of the company’s only approved drug, Lymphoseek. Gonzales was hired in 2014 with a goal of increasing sales for the drug, a radioactive diagnostic agent used to locate lymph nodes draining a primary tumor site in patients with solid tumors to determine if cancer is spreading. Gonzales maintains that he is eligible for an additional $750,000.

Navidea’s stock has been in decline with the executive shakeup, as well as other issues facing the company, including a conflict between Gonzales and Navidea’s chairman of the board, Michael Goldberg. Shares of Navidea are trading at 89 cents. The stock has steadily declined since issues with the company were first raised more than a week ago.

In March, Navidea announced it would be forced to delay its annual 10-K filing with the U.S. Securities and Exchange Commission due to bookkeeping issues with its subsidiary Macrophage Therapeutics. The issues with Macrophage resulted in the resignation of Microphage’s CEO Michael Goldberg, also Navidea’s chairman, as well as the company’s chief operating officer. Navidea is expected to file the form by May 17. Goldberg accused Gonzalez and past board members of hindering the progress of Marcophage’s work on developing other uses for Lymphoseek.

Goldberg told Columbus Business First that he is confident things will work out fine.

"This distraction, while damaging and clearly slowing us down and having an effect on our stock price, will reverse very, very quickly. This past quarter obviously was a quarter based on where things were," Goldberg told the publication. "Starting with the second quarter, we're looking forward to seeing some real changes as the company is prioritized and refocused on this amazing technology engine."

Not only has the board shakeup caused a delay in its filing, but a Houston-based investment firm, Capital Royalty Partners II L.P., accused Navidea of “defaulting on a $60 million loan because of the ‘change in control’ of the company amid the board shakeup,” Columbus Business First reported. Capital Royalty Partners attempted to freeze its bank accounts with Navidea, but earlier this month Navidea fought the attempt in court and was successful in halting Capital Royalty Partners from freezing its accounts. Navidea argued that new directors on the company board of directors does not constitute a default on the loan. A hearing has been set for later this week in a Texas court.

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