EndoCyte CEO Ron Ellis has resigned from the company he helped found and the cancer drug developer has named chief operating officer Mike Sherman his successor.
West Lafayette, IN-based EndoCyte (NASDAQ: ECYT) gave no reason for Ellis’ sudden departure. In a securities filing, the company said that Ellis notified the company of his resignation from his executive and board of director positions on Thursday, and that the board accepted the resignation on the same day.
According to a separation agreement, EndoCyte will pay Ellis $944,717 in severance benefits. The company is also advancing the vesting date of stock options and restricted stock unit awards that otherwise would not have vested until 2018. The company says in the agreement that the payment and benefits to Ellis have a greater value than what he would be entitled to under the severance agreement signed in May 2015. Ellis agrees he won’t sue the company and he will communicate with Sherman as a consultant for 90 days, though he will receive no additional compensation for that role, according to the separation agreement.
EndoCyte takes a personalized approach to cancer drug development by using its technology to develop and match a therapy to the patients most likely to respond. That technology attracted the interest of Merck (NYSE: MRK), which signed on in 2012 to take EndoCyte drug candidate vinafolide into mid-stage clinical trials in ovarian cancer. The deal paid EndoCyte $120 million up front, and pledged up to $880 million in milestone payments if the drug hit as many as six cancer targets. But the companies halted trials two years later after an interim analysis showed the drug failed to show efficacy. Merck later returned all rights to the drug to EndoCyte. EndoCyte’s pipeline now includes additional drug candidates in clinical trials for lung cancer and prostate cancer.
Ellis had served as EndoCyte’s president and CEO since 1996. Sherman joined EndoCyte as chief financial officer in 2006, a post he held until 2014 when he was named chief operating officer. Before joining EndoCyte, Sherman worked for Guidant as the company’s vice president of finance and strategic planning.