Acambis, the drug group which supplies smallpox vaccine to the US government, is set to ask John Brown, the chief executive who resigned earlier this month, to stay on to become chairman.
Acambis shares have fallen more than 20 per cent since the well-respected Scot said he wanted to spend more time with his family in Edinburgh.
Investors are understood to have told the company to find a way of keeping Dr Brown on the board, and the favoured option is a move up to chairman. The company is confident the appointment would find favour, despite being in contravention of the Higgs rules on corporate governance, which discourage chief executives from moving up to chairman.
Dr Brown would replace Alan Smith, who has been a non-executive at Acambis since 1995 and chairman for the last four years.
Dr Brown joined Acambis, then called Peptide Therapeutics, as finance director nine years ago and was made chief executive in 1997. Since then he has overseen its transformation from a loss-making biotech into a profitable vaccines developer, largely thanks to a £300m contract to build a bioterrorist vaccine stockpile for the US government.
Although he is staying on as chief executive until a successor is found, he said at the time of the company's interim results this month that he wanted "to spend more nights at home than I do away". Acambis is based in Cambridge and the smallpox contract involves regular trips to the US.
Acambis shares dived 8 per cent on news of his departure, and they have continued to drift since. Observers said the change in management added to the uncertainty, which already exists over how the company's profits can be sustained when it has completed its US smallpox contract.
The company has appointed head-hunters to search for a replacement. The finance director, Gordon Cameron, is expected to be the strongest internal candidate but the job is likely to attract considerable interest from senior directors of some US biotechs.
Dr Brown is also chairman of the Roslin Institute, near Edinburgh, which cloned Dolly the Sheep, and says he will look for a new commercial role with growing companies. "There is some terrific science in Scotland and I want to be involved in creating more value from it," he said at the time of his resignation.Reuse content