Three CEOs step down at local firms

SPHERIX: Gantt resigns after directors reject his proposal to give priority to information services

September 02, 2004|By Bill Atkinson | Bill Atkinson,SUN STAFF

The head of Spherix Inc., whose eclectic businesses range from developing an artificial sweetener to processing campground reservations, has resigned over differing opinions on the direction of the Beltsville company.

Spherix announced yesterday that Thomas W. Gantt resigned Tuesday as president and chief executive officer, about a year after being named to lead the company. He is the second president to resign from Spherix in 18 months.

He was replaced by Richard C. Levin, a 13-year company veteran who was named acting chief executive and president. Levin is the nephew of Spherix's founder and chairman, Gilbert V. Levin, a Johns Hopkins University-trained scientist and bioengineer.

Gantt, who was a director of Spherix for four years, said he wanted the company to put less emphasis on biotechnology efforts and to focus on information services.

"I believe this is more than the board is willing to consider at this time," Gantt said in a statement. "This is an honest difference of opinion, and we part good friends."

Spherix includes a growing information technology business that runs reservation centers and has funded the company's biotechnology arm. The information technology group, however, recently lost a major contract with the National Park Service to provide campground reservations.

The biotechnology division has struggled to develop proprietary products it can bring to market. But it scored a major contract last year when PepsiCo Inc. began using Spherix's low-calorie sugar substitute, Tagatose, in Diet Pepsi Slurpees sold in 7-Eleven convenience stores.

Gilbert Levin, who is 80 years old and founded the company in 1967, said Gantt's departure was not related to losing the contract with the National Park Service, although it represented $4.2 million, or nearly a quarter, of Spherix's 2003 revenue.

Levin said Gantt was preparing a business plan for 2005, and it was a "logical time to take a look at everything." Gantt wanted to expand the information technology division at the expense of biotechnology, Levin said.

The two spoke Monday, and Levin brought Gantt's plan to concentrate on information technology to the board. After the directors rejected the plan, Gantt agreed to step down Tuesday, Levin said.

"We discussed it quite amicably and decided it was best that he leave at this point," Levin said.

Spherix has been struggling with losses and a falling stock price. The company lost $2.3 million last year and $2.9 million in 2002 after making $567,823 in 2001. Its shares fell 33 cents yesterday to $3.89 on the Nasdaq stock market. Their high was $14.63 in February 2000.

Spherix has had a variety of unusual business goals, from designing technologies to clean drinking water to, as the company has stated, searching for life on Mars.

Levin said he believes the company's biotechnology business could be on the verge of something big with the Tagatose sweetener.

"We are hoping in the biotechnology company to hit a home run," Levin said. "I think we hit it. It is just taking a long way to clear the fence - slow motion."

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