Delcath (NSDQ:DCTH) lost a few more points today after the company announced the termination of president & CEO Eamonn Hobbs, who will be replaced in the interim by a pair of executives from within the company.
The executive shuffle comes just days after Delcath revealed that it had received an FDA "complete response letter," finalizing the agency’s decision not to approve Delcath’s targeted liver cancer therapy device.
Delcath revealed earlier this month that the federal watchdog agency issued a CRL confirming its denial of Delcath’s new drug application for the Melblez technology, which is designed to deliver the anti-cancer drug melphalan using its hepatic delivery system.
"A CRL is issued by the FDA when the review of a file is completed and questions remain that precludes approval of the NDA in its current form," Delcath said, adding that the FDA asked the company to complete additional clinical trials.
The company has been under pressure since an FDA advisory panel last spring recommended against approval for the Melblez device. The FDA’s Oncologic Drugs Advisory Committee voted 16-0 that the risks associated with Delcath’s Melblez Kit are higher than its potential benefits for patients with unresectable ocular melanoma metastatic to the liver. News of the panel’s vote sent DCTH shares down 43.5% to 44.7¢ on May 3. That marked the 2nd giant dip in less than a month, following a 40% Wall Street slide after a preliminary FDA briefing blamed the Melblez device for the deaths of 8 of 122 patients.
Analysts predicted at the time that the FDA would require more studies before advancing the device for approval.
Wall Street wasn’t much enthused by the news of Hobbs ouster, with shares down about 1.6% to 32¢ as of 3:55 p.m. today. Hobbs, who was fired effective September 10, also resigned from the company’s board of directors. He remains eligible for severance, according to a company statement.
Hobbs will be replaced in the interim by current executive vice president and global business operations head Jennifer Simpson and executive vice president and CFO Graham Miao as co-presidents and co-CEOs. Board member Gabriel Leung was named board chairman, and the board appointed a "transition committee" to help lead the search for a new president & CEO.
Hobbs’ ouster isn’t the 1st C-suite surprise this month. InVivo Therapeutics (OTC:NVIV) has had some inner turmoil of its own, with the sudden departure of interim CFO Sean Moran, who quit after just 2 weeks in the role. Moran had taken the job after the sudden departure of CEO & CFO Frank Reynolds, who resigned late last month citing a “medical condition”. Interim CEO Mike Astrue has also been manning CFO duties while the company searched for a new appointee. InVivo announced today that it named Gregory Perry as the company’s new interim CFO, effective Monday, September 23.
