Elliot Goldstein, the controversial chief executive of British Biotech, has been ousted from his post after failing to pull off a merger deal for the UK biotech industry pioneer.
British Biotech said last month that talks with a German drug maker had broken down, the latest in a string of failed negotiations which had added to the perception that Mr Goldstein was standing in the way of a deal.
He left the company following yesterday's announcement after four years at the helm, taking a £400,000 pay-off.
Christopher Hampson, the chairman, said yesterday that "success had proved elusive" for Mr Goldstein and the board wanted new blood and fresh ideas to drive the search for a big deal. It needs to get its hands on a new portfolio of products because there is no prospect of any of British Biotech's four remaining in-house drugs reaching the market before its cash pile of £43m runs out.
Mr Hampson said: "Elliot has done a terrific job when you look at what he inherited. He has dealt with British Biotech's past history and brought down a cash burn that was running at £50m a year."
Calls for Mr Goldstein's removal have been growing in recent months and in particular since the disclosure of talks with MorphoSys of Germany. The deal never found favour with shareholders and was abandoned last month.
Mr Goldstein went out of his way at the time to say that a dispute over the merged company's management structure had not been at the heart of the latest failure. It is widely believed that Mr Goldstein's desire to secure a top job scuppered previous negotiations, including with Antisoma and Xenova, the UK cancer specialists.
Mr Hampson dismissed the claims. "Elliot never stood in the way of any deal and these sort of social issues never reared their head. Unfortunately this is one of those myths that keeps getting repeated until people start to believe it. That can in itself be a barrier and maybe people didn't come forward to do a deal who otherwise maybe would have done."
British Biotech shares rose 0.3p to 4.8p on Mr Goldstein's departure. They have been on a downward trajectory since 1998, when a share price of 145p took them to the brink of the FTSE 100. The company's supposed wonderdrug for cancer, marimastat, failed to work and the previous management was ousted after claims that it failed to give timely information to shareholders on marimastat's disappointing performance in clinical trials. It is still being threatened with legal action from lawyers representing some shareholders, but no formal proceedings have begun.
The company has initiated a search for a new boss and appointed Tim Edwards as acting chief executive. Mr Edwards is a former corporate financier who moved to British Biotech in 1997 from NatWest Markets, and who has been chief operating officer since May. Mr Hampson said Mr Edwards was a candidate to take the top executive post on a permanent basis.