ML Labs to contest pay off for chairman

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The Independent Online

A new management at ML Laboratories, the perennially underperforming biotech company, was last night trying to negotiate down a £640,000 pay-off for the sacked chairman, Stuart Sim.

A new management at ML Laboratories, the perennially underperforming biotech company, was last night trying to negotiate down a £640,000 pay-off for the sacked chairman, Stuart Sim.

ML confirmed yesterday that the veteran biotech director Ian Kent will become executive chairman, and Kieran Murphy - a former head of the vaccines business at the global pharmaceuticals giant Novartis - would be chief executive. They have been charged by shareholders with launching a big cost-cutting drive across the company, which has 155 employees across seven sites in the UK.

ML lost £10.9m in the year to last September, and has less than £10m in the bank. The pay-off for Mr Sim - who was paid £321,000 a year and on a two-year contract - is therefore significant to the company's ongoing financial health.

Messrs Kent and Murphy are also examining the future of each of the company's products and development projects, which include treatments for scarring and kidney failure and a range of novel inhalers.

A rescue rights issue at the start of last year raised £14.4m but the shares had fallen from 22p then to a low of 15.75p. Yesterday's shake-up sent them up 3p to 21.25p. A shareholder revolt, led by the Jersey-based tycoon David Kirch, had made Mr Sim's departure inevitable. Investors gave their backing to the new team on a conference call last Thursday.

Mr Kent said: "This is a company that has underperformed consistently for five years. Shareholders were given a clear indication in January 2004 that there would be management change. People tend to run out of patience."

Mr Murphy will be paid £200,000 a year as a full-time chief executive, with Mr Kent receiving £60,000 for part-time work as executive chairman.

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