April 6, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Clinical stage Seattle-based biotech Acucela Inc. will most likely be seeing a changing of the guard soon, with the company poised to replace current chief executive Brian O’Callaghan with former CEO Ryo Kubota when a special shareholders meeting is held May 1.
During that meeting, which a judge recently ruled could go ahead despite massive resistance from the company’s management, Kubota is expected to leverage his significant shareholdings and nominate three key allies, Yoshitaka Kitao, Robert Takeuchi, Shiro Mita and Eisaku Nakamura, in an attempt to return to the helm.
Still, Acucela has been pushing back against the proxy fight for control of it board and strategy, saying March 12 that the recent push by its ousted CEO and a group of disgruntled shareholders to hold a special shareholders meeting has no merit.
Kubota and SBI Holdings, Inc., the Japanese parent corporation of several Acucela shareholders, filed a lawsuit in Thurston County Superior Court earlier that week that tried to force the company to hold a special shareholders’ meeting no later than April 28.
Acucela disputed that attempt, however, saying in a statement Kubota does not have the standing to sue, nor does SBI have the votes it needs
“At the time it submitted its letter (requesting a meeting) to Acucela, SBI did not hold the requisite votes to demand a special meeting ... and it was therefore of no legal effect,” the company said in a press release. “Dr. Kubota had no right to seek any relief in connection with the lawsuit because Dr. Kubota did not himself submit any demand that Acucela call a special meeting of shareholders.”
Acucela also said it ousted Kubota in late January because he “was unable to transition from founding visionary to a public company CEO.”
The judge ultimately disagreed with them and ruled the meeting can be held—during which close watchers of the company are speculating Acucela will soon get a new CEO, saying goodbye to the controversial O’Callaghan, whose previous company, San Diego biotech Sangart, went up in flames.
“The company apparently went ‘missing in action’ in 2013 after burning $260 million on research and development,” wrote the Puget Sound Business Journal. The company essentially went dark after a failed clinical trial and O’Callaghan next resurfaced as head of Acucela last September.
Acucela has been facing a shareholder insurrection since firing Kubota, after a spate of investors in the company began pressing for the firm’s management to oust four out of five of the company’s board members.
That latest coup came barely a month after Acucela replaced Kubota to appease upstart shareholders who are looking to overhaul the firm’s directions. In December, Acucela replace Kubota, who owns more than half of the company’s shares, with O’Callaghan, its former president and chief operation officer.
SBI said it is now pressing for a new suite of board members in the hopes they will focus more on the biotech’s balance sheet and profitability.
"[The move] is necessary in order to ensure the long term financial viability of the company,” SBI said in a statement. As part of that push, SBI said it wants board members Peter A. Kresel, Glen Y. Sato, Michael T. Schutzler and Brian O’Callaghan out, to be replaced with four nominees of its choosing.
Now, however, Kubota and SBI are saying the changes made were not enough. They want the court to force a new meeting so that the biotech’s future can be decided once and for all--and they’d like their direction to be the one followed.
Acucela pushed back on March 13. “We have reached out to SBI in order to explain our views on the validity of their demand,” O’Callaghan said in a statement, “but they have continued to condition any meeting on requiring Acucela to accept the request of holding a special meeting, an action that Acucela believes that it is not legally required to undertake.”
Acucela develops treatments for blindness and other sight-threatening diseases. In 2014, Acucela became a publicly listed company in Japan and raised around $162 million.
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