Human Genome shifts top managers

Rosen is president, COO

Karabelas to be chairman

Founder, CEO Haseltine retiring

September 21, 2004|By Stacey Hirsh and William Patalon III | Stacey Hirsh and William Patalon III,SUN STAFF

Human Genome Sciences Inc., the Rockville biotechnology company whose model to battle the worst maladies using the human genetic map captivated and then disappointed investors, announced yesterday a changing of the guard to take effect as its founder, a seminal leader in the industry, retires.

Craig A. Rosen, who has worked at Human Genome since the company began 12 years ago, was promoted to president and chief operating officer, effective immediately. Argeris "Jerry" N. Karabelas will become chairman of Human Genome's board of directors after Chairman and Chief Executive Officer William A. Haseltine's previously announced retirement takes effect Oct. 17.

Human Genome is continuing its search for a new CEO who can help bring the company's first stable of drugs to market and put it on a path for growth, although the company said there is no deadline for making the key appointment. Until the new CEO is found, Rosen, 46, will be responsible for the company's day-to-day operations.

"Throughout the last 12 years, Craig has proven himself to be an inspired leader," Haseltine said. "When I retire from Human Genome Sciences as planned in October, I will leave with confidence that our company and its people are in good hands."

Human Genome is continuing efforts to transform itself from an early-stage bioscience company into a producer of commercially viable drugs. In its formative years under Haseltine, Human Genome, like many of its biotech brethren, amassed a treasure trove of technology and left commercialization for later.

Haseltine, a former Harvard University professor, founded Human Genome with a belief that it would be possible to defeat the worst human maladies using the human genetic map, known as the genome, as the guide.

His almost mystical view of biotechnology's promise captivated investors and propelled the company's shares to a peak of almost $113 in March 2000. The company's stock plummeted after 2001 and closed yesterday at $12.71, up a penny, on the Nasdaq stock market.

Investors ultimately came to understand that the huge investments and long lead times required to develop new drugs meant a company's profitability could be years away. Setbacks at many of the top biotech companies hastened investor concerns, and the prices of biotech shares suffered greatly.

Human Genome was no exception. In February, the company ended development of Repifermin, once viewed as one of its primary product candidates. Although the drug had been billed as a promising treatment for the painful mouth sores experienced by chemotherapy patients, clinical trials found that it was little more effective than a placebo, and the research was ended.

"You always want your products to succeed," Rosen said. "You can never predict ahead of time which ones will. We've had failures, everybody does in the industry. Obviously, I'm as hopeful for the next one as anybody else in the company."

The company also cut 200 jobs this year, bringing its work force down to 900. With no products on the market, Human Genome has never been profitable, although it has generated some revenue through partnerships. The company had $1.1 billion in cash and short-term investments at the end of its second quarter on June 30.

In late March, when Haseltine made his retirement plans public, the company also made official its plans to focus on only its most-promising technologies. Human Genome is concentrating its work on oncology, immunology, autoimmune diseases and infectious diseases, including potential treatments for cancer, HIV/AIDS, rheumatoid arthritis and lupus.

Rosen said there is excitement at the company, not so much about the leadership changes as about the company's scientific achievements.

"The excitement is from the progress of the clinical candidates. We announced this year that we completed enrollment on two very large phase two programs, one for lupus and one for arthritis," Rosen said. "I think the company is very excited about the progress we've made on Albuferon, the hepatitis drug."

Rosen was the first senior manager Human Genome hired when he was brought on as head of research in 1992. He became a member of the board in 1992.

Rosen's responsibilities have increased to include manufacturing, strategic marketing and business development. He was promoted president of research and development, although Rosen said he has, in effect, been acting chief operating officer for about a year.

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