Scotia said Dr Horrobin had stood down following a dispute about the appointment of Dr Robert Dow as chief executive of the group.
Dr Dow replaced Dr Horrobin as head of the group at the start of this year. However tensions between the two men have been running high since then and Dr Horrobin has mounted a campaign among other directors to force Dr Dow out of his new position.
The boardroom battle is complicated by the fact that Dr Horrobin was responsible for hiring Dr Low last September as the company's medical and development director.
Dr Horrobin is understood to have been unhappy at the radical changes Dr Dow has sought to introduce, including cutting down the group's product portfolio from 20 drugs to five to concentrate on its cancer treatments.
Scotia said in a statement yesterday: "The board believes that it is essential that all directors should support Dr Robert Dow, who was unanimously appointed chief executive on 1 January 1998, his management team and his revised strategy for Scotia.
"Dr Horrobin, who first recommended Dr Dow to Scotia, far from offering his support, sought to convince the board that it should remove Dr Dow from his position. In the light of the foregoing, the board requested the resignation of Dr Horrobin."
Scotia claims the board remained unanimously behind Dr Dow and his future plans for the group.
Dr Horrobin's departure from the group throws the future of his and his family's 17 per cent stake in Scotia, which is worth almost pounds 51m, into doubt. He has undertaken not to sell a large part of his holding until next year, but could sell 4 million shares immediately.
His departure also comes at an awkward time for Sherri Clarkson, Dr Horrobin's wife. She has already decided to step down as managing director of Scotia's drug discovery division, a position that drew criticism from some analysts who cast doubts about her qualifications for the job. However she is not due to leave the company until the end of June.
The news of Dr Horrobin's departure was met with ambivalence in the City and Scotia's share rose 1p to 387.5p yesterday.
Under Dr Horrobin, Scotia's reputation among analysts had become tarnished after the shares had undergone a roller-coaster ride and fallen from a peak of 808p in 1996.
Dr Horrobin signed an agreement with Scotia when he stood down as chief executive to act as a consultant for the group for pounds 50,000 a year. It was unclear yesterday if he would continue in this role but Scotia said he will not be entitled to any pay-off on stepping down as a non-executive director.
Dr Horrobin will now concentrate on building up his new company Scarista, which has bought an exclusive licence covering all technology related to Scotia's research and development on psychiatry, asthma and central nervous system treatments.
Scotia is the drugs company behind Olibra, the new ingredient used in yoghurts which makes you feel fuller for longer. The yoghurts have already hit UK supermarket shelves and the group has recently teamed up with St Ivel to create a new range of desserts.Reuse content