Biotech rejects calls to halt legal action
Thursday 24 September 1998
The demands came as it emerged that Dr Keith McCullagh, Dr Millar's main rival who yesterday stepped down as chief executive, received a payoff of pounds 672,000.
At a shareholders' meeting marked by strict security measures to segregate the media pack from participants, investors gave the board a 40-minute grilling over the action against Dr Millar, the former head of clinical research who was dismissed after voicing doubts over two of the company's star drugs to one institution.
The bitter battle between Dr Millar, who lifted the secrecy on trials of the company's pancreatitis drug Zacutex and the anti-cancer treatment Marimastat, and Dr McCullagh, caused a collapse in British Biotech's share price and two investigations by US and UK stock market regulators. The company is suing Dr Millar in the High Court for breach of contract.
John Williams, one shareholder asked the board: "In view of the bad PR, in view of the high costs, can you tell me exactly what you hope to gain [from suing Dr Millar]?"
Another investor said: "The share price is a disaster. The litigation with Dr Millar is something we should not be bothered with. It is a small blip. How much would it cost to settle?"
The chairman, John Raisman, replied: "There are very strong grounds for the actions and possibly substantial damages to be recovered."
However, Mr Raisman, who is set to step down at the end of the month, held out the possibility that the company could settle the case at a later stage. He added: "It will clearly have to be on realistic terms. I don't think any realistic terms have been proposed."
Dr Millar is understood to have asked for around pounds 90,000 to settle the case. The company said that Dr McCullagh's leaving package will include one year's salary, worth pounds 430,000, plus a one-off payment of pounds 242,000 to his pension fund.
He will be replaced by Elliott Goldstein, a former executive at SmithKline Beecham. Christopher Hampson, chairman of building materials group RMC, will take over as chairman.
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