Arcturus Therapeutics board fires CEO

drugs, medicine  picture: thinkstock

Israeli company Alcobra merged with US-based Arcturus and the combined company still has Israeli investors.

Israeli biotech company Alcobra, which was floated on Nasdaq in 2013 but after failure in development of its product for treatment of attention deficit hyperactivity disorder was merged with US company Arcturus Therapeutics, is still not finding life easy, even in its new guise.

Arcturus announced on Friday that it had dismissed its president and CEO, Joseph Payne, who was the founder and CEO of Arcturus as a private company, and continued as CEO after the merger with Alcobra. Mark R. Herbert, vice president of Business Development and Alliance Management, has been appointed to serve as interim president. The announcement does not attempt to hide the fact that Payne was dismissed by the board of directors and did not leave of his own accord. Following the announcement, the company's share price fell 18%, and it now has a market cap of some $62 million. At the time of the merger with Alcobra, it had $35 million cash, which came from the Israeli company.

Arcturus is a drug development company. Its current troubles are an internal matter in the US company that was merged with Alcobra, but it is interesting from an IsraeIi point of view, because Israelis are still among its investors. Alcobra shareholders received 40% of the merged company. The largest Israeli shareholder at the time of the merger was activist fund Brosh Capital, which held 6.6% of Arcturus after the merger.

Brosh Capital is no longer a party at interest in Arcturus. It apparently started to sell shares immediately after the merger. In the month following the merger announcement, in September 2017, the share price rose 54%, but it has lost half its value since that peak.

The decline was apparently caused by sales of shares by investors in Alcobra who were not interested in the merged company, among them Brosh Capital, which appears to have sold its holdings at a profit of 30-40%.

Published by Globes [online], Israel business news - www.globes-online.com - on February 5, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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drugs, medicine  picture: thinkstock
drugs, medicine picture: thinkstock
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