OncoGenex CFO Resigns After Developing Personal Relationship With CEO
Michelle Burris, the chief financial officer and executive vice president of operations at Bothell, WA-based OncoGenex Pharmaceuticals (NASDAQ: OGXI), is stepping down from her executive management roles after she and CEO Scott Cormack disclosed to the company’s board that they have “a developing personal relationship.”
The disclosure, made this afternoon in a filing with the Securities and Exchange Commission, says that Burris resigned as OncoGenex’s principal accounting officer, chief financial officer, secretary and treasurer on Feb. 1. Burris will continue to serve as executive vice president of operations until March 31, and as an operations consultant for about a year afterward, she said this afternoon when reached by phone. Burris will be paid a $34,000 monthly retainer as a consultant, or about $408,000 for a year, and a $410,000 lump sum severance payment at the end of her consultancy, according to the regulatory filing. Burris previously reported to Cormack, but will now report directly to the board. Some of her duties, including the signing of contracts on behalf of the company, will be parceled out to others.
The two executives voluntarily brought the relationship to the attention of the board of directors shortly after it began, Burris says. “We don’t want to pursue a relationship in the current roles we’re in,” Burris says. “So we proactively went to the board in order to ensure that the shareholders’ interests were maintained, and the continuity of the operations would be maintained.”
OncoGenex is entering an important year as a company, as it awaits data from the third and final phase of clinical trials of custirsen, an experimental drug for prostate cancer. The drug is being developed in a partnership with Israel-based Teva Pharmaceutical. Researchers expect to find out by the of this year whether the OncoGenex drug can help men with prostate cancer live longer, based on findings from a 1,000-patient clinical trial known as Synergy.
Cormack, 47, has served as CEO of OncoGenex since it merged with Sonus Pharmaceuticals in 2008. Burris, 46, joined the company in January 2011. Both are single, Burris says.
The two senior executives brought their relationship to the board’s attention because “it was the right thing to do,” Cormack says. The company’s main accounting functions will now be overseen by Susan Wyrick, and Burris will continue to oversee operations, Cormack says. If the Synergy results turn out positive, then OncoGenex will move into a commercialization phase, and look for a new chief financial officer with experience handling marketed products, he says.
The executives spent time in the afternoon informing employees, analysts, and top shareholders of the new management structure.
“We’re both very private people from a personal perspective, coming out with this is a bit unusual,” Cormack says. Often, he noted, personal relationships between executives never get disclosed to shareholders.