EntreMed Inc. said yesterday that company founder and Chairman John Holaday had relinquished the title of chief executive officer, leaving the struggling company with neither a CEO nor a chief financial officer.
The company also disclosed that it had been notified that Nasdaq was moving to delist its stock.
The Rockville drug developer said it will appeal a determination by the Nasdaq staff that its common shares be removed from the Nasdaq National Market because its market capitalization - the value of its outstanding stock - has fallen to about $34 million, below the required $50 million minimum.
EntreMed said Holaday, who remains chairman, had taken on the title of chief scientific officer and stepped aside as CEO as part of a "move to further focus the company's business and scientific efforts."
The change effectively gives control of the company's business affairs to company President Neil Campbell as EntreMed faces an immediate need to raise money amid a dismal market for doing so.
The company has been struggling to find funding by licensing one of its three anti-cancer drugs in clinical trials to a larger pharmaceutical company, selling additional stock or both.
As recently as September, Holaday was publicly upbeat about completing such a licensing deal with another company.
EntreMed cut 60 jobs this fall - more than half of its staff - to save money in the meantime, but no licensing deal has been announced.
As the company's cash dwindled - to $11.4 million as of June 30 - its stock also fell. The company has said it has enough cash to last only into the fourth quarter, which it has entered. Shares have lost 82 percent of their value this year, falling from a 52-week high of $12.06 a year ago to close off 24 cents yesterday at $1.55.
EntreMed became the object of investor frenzy in May 1998 after Nobel Prize winner James Watson intimated in a New York Times article that EntreMed's experimental drugs Angiostatin and Endostatin would "cure cancer." The company's shares rocketed nearly 330 percent in one day to $51.81 and also unleashed a barrage of pleas from cancer patients. Many other young biotechnology companies also have been hit hard in recent months as investors have turned away from the sector.
EntreMed plans to move its shares to the Nasdaq SmallCap Market if its appeal to the Nasdaq Listing Qualifications Panel fails. No hearing before the panel has been scheduled. EntreMed's shares will continue to trade on the Nasdaq National Market in the meantime.
EntreMed's last chief financial officer was Thomas P. Russo. In a May conference call with analysts, Holaday said Russo had left months before for "personal reasons."
Holaday co-founded the company 11 years ago. It was among the first to seize on the idea, then unpopular, of fighting cancer by using nontoxic drugs to cut off the blood supply to tumors. Now, dozens of companies have embraced the strategy, though its effectiveness remains unproved.
The company said it wouldn't immediately hire a new CEO, a position Wells Fargo Securities analyst Alan Auerbach said would be difficult to fill under the circumstances.
Holaday and Campbell are reporting directly to a committee of EntreMed's board. Company spokeswoman Amy Finan said she did not know which directors were on the committee.
"The company is under very good leadership with Neil's business and financial strengths and John's scientific strengths," she said.