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Ex-Genentech (RHHBY) Boss Resigns From Roche (RHHBY)'s Board; Fears Conflict Of Interest With New CEO Post At Google Inc.'s Calico

9/4/2014 6:14:49 AM

Ex-Genentech Boss Resigns From Roche's Board; Fears Conflict Of Interest With New CEO Post At Google Inc.'s Calico

September 4, 2014

By Mark Terry, Breaking News Staff

Related to yesterday's story about Calico’s collaboration agreement with AbbVie (ABBV), Roche (RHHBY) has announced that Arthur D. Levinson, CEO of Calico, has resigned from Roche’s Board of Directors, effective immediately. The decision was made to avoid any conflict of interest.

Art Levinson (64) was most prominent as CEO of Genentech from 1995 to 2009, where he had previously had positions of increasing responsibility starting as a research scientist in 1980. Levinson has served on the Roche Board of Directors since 2010. He currently remains chairman of Apple Inc. He also serves on the Board of Scientific Consultants of the Memorial Sloan-Kettering Cancer Center, the Industrial Advisory Board of the California Institute for Quantitative Biosciences, and the board of several other companies including the Broad Institute, affiliated with MIT and Harvard. He also served as the director of Google from 2004 to 2009.

Yesterday AbbVie and Calico, a spinoff subsidiary of Google (GOOGL), announced a collaboration agreement that will include a San Francisco Bay area research facility. Both companies are each investing $250 million initially, with another potential investment of $1 billion between the two of them. The deal has Calico handling R&D for five years on new treatments to control lifespan and other age-related diseases, including neurodegeneration and cancer. AbbVie will support early R&D, then after completion of phase 2a studies will manage and commercialize any viable projects.
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In a press release, Roche Board Chairman Christoph Franz said, “I would like to thank Art for his many important contributions, both as a member of the Board of Directors and during his long history with Genentech and Roche. We regret Art’s decision but at the same time understand his reasons. The Board has greatly valued Art’s focus on patients, his scientific expertise and business leadership during this period of growth for Roche.”

Although most analysts don’t believe Levinson's departure will affect the company’s value, they do note that Levinson brought a great deal of experience and value to the company, especially in his experience with cancer-related products. “Apart from Art,” says Fabian Wenner, an analyst at Kepler Cheuvreux in Zurich, “there’s only one board member now with sector experience which is quite a loss for Roche in my view. The fact that Calico partnered with AbbVie and not with Roche is not a good indicator.”

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