Human Genome's Haseltine to retire

CEO likely to leave in fall

drug firm faces cutbacks

March 25, 2004|By NEW YORK TIMES NEWS SERVICE

William A. Haseltine, the bold-talking chairman and chief executive of Human Genome Sciences Inc., will be leaving the Rockville company as it struggles to realize his grand vision of parlaying genetic information into a cornucopia of new drugs.

Haseltine said yesterday that he would retire later this year, probably in the fall, after a successor is found and he turns 60. He says the move is voluntary, and that as the company shifts from gene research to drug development, it needs an experienced pharmaceutical executive at the top rather than a scientist like himself.

Still, the company is under pressure because its two leading drugs have failed in clinical trials. The company's stock, which closed yesterday at $11.39, has fallen far from its heights of $241 four years ago when it seemed to epitomize the promise of genomics.

The company plans to announce today that it is dropping development of about half the drugs in its pipeline to focus on five of the most promising ones. It said it is also cutting about 200 people, or about 20 percent of its work force.

Haseltine, who also will give up his board seat, denied he was pushed out: "It was really the other way around. I've been pressuring the board."

Max Link, the lead independent director of the board, agreed. "The stock price did not play any role," he said. "We were looking at the fundamentals and felt the time had come now to sharpen our focus."

Still, it did not seem obvious that such changes were need now. With about $1.3 billion in cash, Human Genome is not in imminent danger of running out of money. And with its most advanced drug in mid-stage clinical trials, it is no further advanced in drug development than it was before its first two drugs failed.

Haseltine's departure in some ways echoes that of J. Craig Venter, who left the top spot at Celera Genomics two years ago as that company turned to drug development and away from genomics. Venter, however, was clearly pushed out.

The two men, once business partners, have since become unfriendly rivals. Both are widely described as brilliant and driven, with big egos and a penchant for the grand statement.

Human Genome was founded in 1992 as the for-profit partner of a nonprofit institute set up by Venter to find genes.

Haseltine thought having a strong genetic database would be a shortcut to discovering drugs. His idea seemed vindicated in 1993 when SmithKline Beecham, now GlaxoSmithKline, paid $125 million for access to Human Genome's genetic database.

But genomics has not accelerated drug development. While drug companies have been inundated with genes, they must still figure out what the genes do and still must develop chemicals to influence the effects of those genes.

The company's most advanced drug now is LymphoStat-B for lupus and rheumatoid arthritis, which is in the second of three phases of clinical trials.

Human Genome said it would now focus on that drug, as well as on two drugs for cancer and a long-acting alpha interferon for hepatitis C, all now in early stage trials. It also plans to start trials this year of an AIDS drug designed to block the way the virus enters the cells it infects.

Haseltine, who was a noted professor at Harvard before founding Human Genome, said he would probably work now on applying science to improve health care in the developing world.

He said he would also remain active in Washington policy affairs. He is on the board of trustees of the Brookings Institution and involved with the Trilateral Commission, the Council on Foreign Relations and other organizations.

According to the most recent proxy, he owns 6 million shares of Human Genome, worth about $70 million. His stake was once worth more than half a billion dollars.

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