Dive Brief:
- Roughly one month after struggling biotech Exicure’s CEO-CFO Jung Sang (Michael) Kim took control, the company’s board has taken the somewhat unusual step of offering its full-throated support of his efforts to evaluate “strategic alternatives to maximize stockholder value,” including by exploring transactions with new potential partners, the company said.
- “Mr. Kim will lead the Company’s continuing efforts to identify and evaluate a range of potential strategic transaction alternatives, including transactions involving industries and businesses unrelated to our historical operations,” the Chicago, Illinois-based company said Friday in a press release.
- The board’s backing comes as Kim attempts to right the company’s course following struggles with investors, the shuttering of its R&D department and layoffs of the majority of the company’s workforce.
Dive Insight:
Kim, 62, took on the dual roles of CEO and CFO — as well as serving as the company’s president — in April, after its CEO, Dr. Matthias Schroff and CFO Elias D. Papadimas both stepped down from their posts.
Prior to joining Exicure, Kim served as president of fuel pallet manufacturer Hanil Energy for four years, according to a May 2 filing with the Securities and Exchange Commission. He also previously served as CEO for Signal Entertainment — an entertainment holding company aimed at bringing Korean media to China—starting in 2015.
In connection with his roles as CFO, CEO and president, Kim — whose employment is at will — will receive an annual base salary of $300,000, according to the May filing. Kim is also eligible to receive a cash bonus “in the Board’s discretion, in connection with a sale of the Company, subject to his continued employment through the consummation of such sale,” the company said.
Kim has the “full confidence” of Exicure’s board as it looks to examine “strategic alternatives” following a rocky few years, with the company forced to suspend its pre-clinical operations, halt its R&D activities and take other widespread measures to reduce costs in 2022, including significant staff layoffs.
There is “no assurance that the review of strategic alternatives will result in any transaction or other strategic alternative,” Exicure said in the Friday press release.
The struggling biotech firm outlined its plans to find such alternatives that would help to boost shareholder value in March, following its report of financial results for its fiscal 2022.
This included pursuing out-licensing options for its cavrotolimod drug — a clinical-stage medication aimed at targeting tumors in cancer patients — as well as other historic assets, the company said in a March filing.
“While the foregoing efforts with respect to our historical assets are continuing, we do not expect they will generate significant value for stockholders, at least in the near term,” the company said in the March filing, which includes “exploring growth through transactions with potential partners that see an opportunity in joining an existing, publicly-traded organization.”
In February, Exicure announced the close of its private placement with its existing investor CBI USA, which agreed to acquire 3.4 million shares in common stock for an aggregate price of $5.4 million in September 2022, according to a press release.
CBI took a controlling stake in the biotech with the purchase and is now the beneficial owner of approximately 50.4% of its outstanding shares, the company said. The purchase came as the company also announced plans to significantly reduce its workforce in September, eliminating approximately 66% of their existing workforce.
Exicure did not respond to a request for comment.
