McCullagh resigns as Biotech head

KEITH MCCULLAGH, the chief executive of British Biotech who has been at the centre of a storm over share dealings and corporate strategy, announced his resignation yesterday.

He believed it was best to "settle any uncertainty" and to "end the debate" by leaving the company in September that he had formed 12 years ago.

The move came as British Biotech tried to regain the support of shareholders by issuing a 30-page rebuttal of damaging allegations by the former head of research, Andrew Millar.

The company's share price fell a further 3p to 59p but there were signs last night that the salvage mission was succeeding. Influential shareholder Perpetual, which has been highly critical of British Biotech management, said it was "relatively satisfied" that outstanding issues were being addressed.

British Biotech said in the circular that it had already won the support of Mercury Asset Management which is the biggest single shareholder in the company.

Dr Millar had claimed in the past that investors were being misled by over-optimistic forecasts about the drug stream. He was sacked for making his views known to shareholders behind the board's back.

Dr Millar, talking from his home in Oxfordshire yesterday said it was "a bit of a relief" to hear that Dr McCullagh was going. But he added: "That should only be the first step in a corporate change of direction."

He had called for cutbacks and his wishes were granted yesterday. The company unveiled plans to reduce spending by making 42 staff redundant, amalgamating offices and developing a corporate alliance in the United States. But company officials said that the annual cash burn would remain at around pounds 50m to pounds 60m, meaning that it would run out of money within three years if new cash was not forthcoming.

Dr McCullagh insisted that all these plans had been in place - but not made public - at the beginning of the year. They were not introduced in response to Dr Millar's criticism, Dr McCullagh insisted.

At a special press briefing, a shaken-looking board led by Dr McCullagh and the chairman, John Raisman, received tough questioning but in turn attacked Dr Millar for damaging the company.

The board members said a decision to sue Dr Millar for unfounded allegations was under review and accused him of endangering two clinical trials.

They believed he was partly motivated by the fact he had wanted a job which had subsequently gone to an outsider, Dr Peder Jensen, who was at the conference yesterday.

Dr Jensen, a board member and development director, said Dr Millar had acted "improperly" in peeking at the results of two studies into various uses of Marimastat and Zacutex, the company's two main drugs.

Dr Jensen, who has been with the company for only three months, warned that "blind" trials could be deemed invalid by regulatory authorities and therefore could be delayed in coming on to the market, "in a worse- case scenario".

But Dr Jensen backed up one of Dr Millar's complaints by saying it would help if there were more people on the board with relevant experience.

On the central allegations of wrongful share dealings, a poor product pipeline and bad corporate strategy, the circular to shareholders said: "The board considers these allegations to be unfounded ... The board is convinced the company has real substance and a worthwhile future."

It also said that it was "fully satisfied" that Dr McCullagh had acted honourably throughout his 12 years at the helm of British Biotech. Mr Raisman said he would be taking steps to find a replacement by looking at both internal and external candidates.

Bob Yerbury, chief investment officer at Perpetual, which holds 9 per cent of British Biotech stock, said the decision by Dr McCullagh to leave was inevitable.

"I think his position had become very difficult inside and outside the company," said Mr Yerbury.

British Biotech's circular finally confirmed that the company is under Stock Exchange investigation but insists elsewhere that the board is satisfied that there is no substance to allegations that certain of the then directors of the company dealt in shares when they should not have done.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Client Services Assistant

£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Ashdown Group: Training Coordinator - Financial Services

£32000 - £38000 per annum + benefits: Ashdown Group: A highly successful, inte...

Recruitment Genius: Business Development Executive - Affiliates & Partnerships

£20000 - £35000 per annum: Recruitment Genius: This multi-award winning foreig...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor