Cetus Corp.'s outspoken president and chief executive, Robert A. Fildes, resigned Thursday, less than a month after a Food and Drug Administration panel recommended against approval of the company's crucial anti-cancer drug.
Chairman Ronald E. Cape, who relinquished the CEO title to Fildes in 1986, was again named to the post, the Emeryville, Calif.-based biotechnology company said in a statement. Also, Hollings C. Renton, chief operating officer, was given the additional title of president. Cetus also said it was reducing its work force by about 10% to cut costs, laying off about 100 of 950 people.
Neither Fildes nor Cape was available for comment Thursday. Renton declined to elaborate on a company statement that said the resignation resulted from "differing views regarding the company's priorities." He acknowledged that the company is looking at strategic changes that would include forming more marketing and research alliances with others in the industry.
However, some analysts said they believe that the delay in approval of Proleukin interleukin-2 was a major factor. "As head of the company, (Fildes) was ultimately responsible for overseeing the clinical strategy and oversight of regulatory affairs," said David Webber, a New York based-analyst with Alex. Brown & Sons of Baltimore.
For the Record
Los Angeles Times Saturday August 18, 1990 Home Edition Business Part D Page 2 Column 5 Financial Desk 1 inches; 31 words Type of Material: Correction
Use of Cetus drug-- Cetus Corp.'s Proleukin interleukin-2 anti-cancer drug is approved for the treatment of kidney cancer in nine European countries. An article in Friday's edition misstated the number of countries.
Cetus is one of the nation's oldest and best-known biotechnology companies, but it has been hemorrhaging red ink since 1987. And, in the years when it was on the plus side during the decade, it was barely profitable. It has focused much of its attention recently on drugs to fight cancer and infectious disease.
U.S. approval of interleukin-2 is "pivotal to getting Cetus to profitability," said analyst Margaret B. McGeorge of San Francisco-based Sutro & Co. Although everyone knew that making the case for approval of interleukin-2 would be a challenge, many thought Cetus' presentation was nevertheless a "disappointment," she said.
Cetus' drug has been approved for the treatment of kidney cancer only in Denmark and the Netherlands. The FDA panel recommended that the company conduct further studies to more specifically identify which patients would benefit from the highly toxic drug, which has serious side effects--such as massive fluid retention--that can lead to temporary heart or kidney failure.
Cetus' data showed that kidney tumors shrank to about half their normal size in about 15% of patients treated with the drug. In about 4% of the patients, the tumors disappeared altogether. But most of the treated patients showed no effect from treatment, and many suffered side effects. About 4% died of complications from the drug.
Analyst Robert Kupor of New York-based Kidder, Peabody & Co. agreed that the FDA panel's decision hurt Fildes. And "his highly intemperate comments" accusing the FDA of bias against the company didn't help his case, Kupor said. However, he added, "his position was probably imperiled considerably before that because of the overall condition of the company, which the CEO must take responsibility for."
Kupor said Fildes, a London-born research scientist who had held posts at other pharmaceutical and biotechnology firms, was brought in, in 1982, to turn Cetus around at a time when it had a "dreadful reputation for slowness and unproductivity." It was inevitable that Fildes would leave after 8 years of little improvement, he added.