Delcath Ousts CEO As FDA Nixes Product Launch
Delcath Ousts Hobbs As CEO, As FDA Nixes Product Launch
QUEENSBURY, N.Y., Sept. 13,2013---- Eamonn Hobbs has been ousted as president and CEO of Delcath Systems Inc., a move announced one day after the firm's cancer treatment system was formally rejected by the Food and Drug Administration for commercial use in the U.S.
The company announced Friday it terminated Hobbs' employment with Delcath Tuesday, and he has stepped down as president of the firm's Board of Directors.
Going forward, Delcath's Executive Vice President, Global Head of Business Operations Jennifer Simpson and Executive Vice President and Chief Financial Officer Graham Miao will serve as interim co-president and co-chief executive officer, according to a statement released by the firm Friday.
Gabriel Leung, a member of the Delcath Board of Directors since 2011, has been appointed chairman of the board.
Delcath learned Thursday the FDA ruled the firm's Melblez Kit is not ready for commercial development in the United States. The company has been cleared to market the device in European Union countries, though sales have been hard to come by, and the company has yet to post a profit.
In its "complete response letter" to Delcath, the FDA raised questions about the efficacy and safety of the Melblez Kit. Specifically, the FDA said Delcath must perform another "well-controlled randomized trial(s) to establish the safety and efficacy of Melblez Kit using overall survival as the primary efficacy outcome measure." The trial must also demonstrate "that the clinical benefits of Melblez Kit outweigh its risks," according to a response to the FDA letter by Delcath.
The company said there were other requirements outlined in the FDA letter that the company is also evaluating as it reviews "potential regulatory paths forward with the FDA," according to the company statement.
Delcath's application to the FDA focused on treatment of ocular melanoma that had spread to the liver.
Melblez uses high-tech catheters to isolate the liver before delivering concentrated doses of the chemotherapy drug melphalan. The system then filters the drug out of patients' blood before returning it to their bodies, allowing a higher dose of the drug to be delivered to tumors while reducing the effect on the rest of a patient's body.
Hobbs said previously the device could be used for other types of cancer in other organs in the future.
Ocular melanoma is diagnosed in approximately 2,000 people a year in the U.S.
Hobbs announced in May the company was working to launch a new clinical trial by the end of this year, aimed at proving the Melblez Kit is effective in treating a more common form of primary liver cancer.
It was unclear early Friday whether that trial had begun.
Delcath's most recent earnings filing was submitted Aug. 6 to the Securities and Exchange Commission.
In that filing, the company reported no revenue for the second quarter. It also reported total operating expenses fell to $10.3 million, a 33 percent decrease from the year-ago second quarter.
The company had 32.3 million in cash and cash equivalents on hand, an increase from $23.7 million the company had available as of Dec. 31.
Thursday's decision by the FDA followed a May 2 decision by an advisory panel to the agency. That panel recommended the FDA not approve the Melblez Kit for commercial use in the United States, also citing concerns about efficacy and safety.
Delcath employed about 60 people in leased space at the Cool Insuring building on Quaker Road, and at a company-owned production facility on County Line Road in Kingsbury, at last report. The firm has refused to update employment numbers in recent months.
Hobbs is better known as the man who launched AngioDynamics, now the largest medical device manufacturer -- as measured by local employees -- in the Glens Falls area. He started AngioDynamics, then called A.D. Inc., in 1988 and stepped down as CEO of the firm in 2009, citing a need to pursue his strengths as a leader of fledgling firms.
MORE ABOUT THE NEW LEADERS:
Delcath provided the following biographical information about the new Delcath principals:
--Simpson joined Delcath in 2012, and has an extensive background in pharmaceutical and oncology product development, clinical trials and global marketing. Prior to her appointment at Delcath, she served as Vice President, Global Marketing, Oncology Brand Lead at ImClone Systems, Inc., a wholly- owned subsidiary of Eli Lilly and Company. Simpson also previously held several leadership positions at Ortho Biotech, now Janssen Biotech, a Pennsylvania-based biotech company that focuses on innovative solutions in immunology, oncology and nephrology. Prior to her time at Ortho, Simpson spent more than a decade as an oncology-nurse practitioner and educator.
--Miao joined Delcath in 2011 as executive vice president and chief financial officer and is a senior financial executive with extensive experience in global business operations, financial planning and analysis, and business development in the United States, Asia and Europe. Previously, he served as chief of staff of the Global CFO Organization and as a member of the financial leadership team of Dun & Bradstreet Corp. Prior to joining Dun & Bradstreet, Miao was executive vice president and chief financial officer of Pagoda Pharmaceuticals, a Shanghai-based specialty pharmaceuticals and medical device company focused in urology and allergy. In addition, Miao has held various leadership positions, including division chief financial officer roles with Symrise, Inc., Schering-Plough Corp. and Pharmacia Corp.. He also previously served as a biotech equity analyst with J.P. Morgan.
--Leung joined the Delcath Board of Directors in March 2011 and holds a wealth of experience in successfully gaining regulatory approval for and launching oncology drugs. He previously served as president of the Pharmaceuticals Business at OSI Pharmaceuticals, overseeing its oncology, diabetes and obesity businesses prior to the firm's acquisition by Astellas Pharma Inc. in June 2010. During his seven years at OSI, Leung held several senior management positions, led the successful filing of two supplemental "new drug applications" and guided them to successful launches in the U.S. oncology marketplace. During his tenure, OSI's market capitalization increased from $1.4 billion to approximately $4 billion at the time of acquisition. Prior to OSI, Leung served as group vice president, Global Prescription Business and head of the Global Oncology Franchise for Pharmacia Corp. At Pharmacia, he served on the CEO's Corporate Operating Committee, overseeing the global oncology franchise and all oncology clinical development projects and the discovery portfolio strategy that led to four successful FDA approvals. Previously, Leung held several leadership positions at Bristol-Myers Squibb. He now serves on the Board of Directors of Albany Molecular Research Inc., and is executive vice chairman of the board and chair of the Global Commercialization Team of Novocure Ltd., a privately-held oncology medical device company.
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Posted: September 2013