Celsion Corp. chief executive Dr.Lawrence S. Olanoff said yesterday that he is quitting Oct. 6 after 14 months on the job so he can return to New York's Forest Laboratories as its president and chief operating officer.
Olanoff spent 10 years in charge of research and development at the pharmaceutical company, which makes respiratory and cardiovascular treatments, among others. He joined Celsion in late July 2005 to help the Columbia biotech transition from a medical-device maker to a drug developer focused on improving drug delivery through heat technology.
During the past several years, the promise of higher-profile positions and potential riches if a new drug makes it big has helped lure many pharmaceutical executives to the so-called "wilds" of biotech. Such companies are often small, unprofitable and unable to offer much in the way of salary, though that's typically countered by big stock option awards.
Baltimore's Guilford Pharmaceuticals recruited a chief executive from Bristol-Myers Squibb Co. in 2004. That same year, Human Genome Sciences Inc. of Rockville found its CEO at Abbott Laboratories Inc. And neighboring MedImmune Inc. brought in a regulatory affairs specialist from Baxter International last year.
But Olanoff's decision yesterday sent a warning to the biotech industry: Landing a star is one thing, keeping him quite another.
"People like to kind of jump ship back to the mother hen, so to speak; it's more security," said Robert M. Iommazzo, a life sciences recruiter with New York's SeBA International LLC. "I think people recently see the value of larger organizations, particularly in the biotech space."
No profit in 24 years
Celsion, which has 26 employees, has not turned a profit in its 24 years. It's founder quit last year. And in June, the American Stock Exchange warned the company that it was in danger of being delisted because of its streak of losses and low shareholder equity. AMEX has given Celsion a Dec. 14, 2007, deadline to turn itself around.
Olanoff was drawn to Celsion by a board member with whom he had previously worked. He didn't want to continue doing the same thing at Forest and saw no opportunity to do what he really wanted, which was move over to the business side of the operation.
So, he took the job at Celsion, commuting from his home in New Jersey to Columbia, where his $149,000 salary is less than a quarter of the $650,000 he was making at Forest. But he was also given a stock option grant that would allow him to buy 6.4 million shares at 38 cents each as an employment "inducement."
Olanoff declined yesterday to give his new salary at Forest, saying only that it was "substantial." He added that money isn't the issue for him when it comes to selecting work, it's the experience that counts.
At Celsion, Olanoff ran the show, overseeing all aspects of the business. Until then, he had typically focused on the science side of things.
"He brought with him a huge amount of experience and know-how. ... In the year that he's been here, he has taken our drug development capability up a number of notches," said Anthony Deasey, Celsion's chief operating and financial officer.
Deasey will act as interim CEO while the board searches for a replacement.
Second in command
At Forest, Olanoff will be second in command, in charge of 75 percent of the company and its 5,000 employees. It's a job he's always wanted but didn't think he could get because, Kenneth E. Goodman, now his predecessor, seemed unlikely to retire soon.
But late this summer, Forest's chief executive officer called Olanoff, arranged a meeting, and told him Goodman was retiring.
"He dropped this bomb in my lap, it was a total surprise to me," Olanoff said. "In a sense, it was an easy decision. It was a harder decision to leave Celsion. I believe we're right on the cusp of being able to show interesting results over the next [year], but I couldn't delay my decision that long."
Celsion's stock closed down 46 cents - nearly 18 percent - to $2.14 yesterday on the American Stock Exchange.
undisclosed; his predecessor earned $775,000
loss of $8.7 million
$149,000[Source: Sun research]