Hycor Replaces CEO After Failed Turnaround Try
A management shake-up at Hycor Biomedical Inc. last week marked the latest attempt by a struggling Southern California biotech outfit to find its way.
The loss-ridden Garden Grove maker of lab equipment and tests for disease forced out its longtime chairman and chief executive, Dr. Richard D. Hamill. On Wednesday, the day of the announcement, the stock advanced 19 cents a share to close at $2, a far cry from its peak of $8.50 in 1990. Hycor shares closed Friday at $2.06, up 6 cents.
Hamill, 59, who worked his last day Friday, acknowledged that the company needs new direction after failing to effect a financial turnaround as promised. “This has been a disappointment to all of us. In spite of the difficulties we were having in the restructuring, the marketplace wasn’t reflecting the future we were building toward,” said Hamill, who owns about 213,000 shares himself.
The company named J. David Tholen to replace Hamill as chief executive and appointed Samuel D. Anderson, a director, as chairman. Tholen, hired in January as the company’s No. 2 executive, has worked for 30 years in sales, marketing and management posts with a variety of large health care product companies.
Hamill said he was involved in hiring Tholen, but that the management changes last week came at the board’s initiative. Hamill resigned from the board. He remains a consultant to the company.
Hycor is one of the many biotechs founded in the 1980s on little more than an idea and a public stock offering. Hamill, hired as its chief executive in 1983, when it went public, soon discovered that its basic technology--for control of diabetes and detection of cancer--couldn’t be commercialized, he said.
He shut down the company’s research operation, bought a Fountain Valley maker of other diagnostic tests, and moved the company’s headquarters to Orange County.
The company made other acquisitions and built annual earnings to $2.8 million on sales of $26 million by 1994. But its product line was beset with low-growth items, prompting the company to sell off about a third of its business in the hope of focusing on the more promising lines.
But, Hamill said, problems in developing European markets and new products have delayed the company’s return to profitability. Last year, it posted a loss of $4.3 million on sales of $19.3 million. He expressed confidence in Tholen’s ability to bring off the sales growth the company sorely needs.
Hamill is retiring with a severance of 20 months’ pay, at his annual salary of $250,000. Stock options he’s received over the years are worthless because their exercise price is far higher than the market price, he said.
He will ponder his next move while vacationing in Idaho in August, he said. He may look for opportunities to advise start-up businesses or step up his community activities. He serves on the boards of the Orange County Performing Arts Center and the Orange County Business Council.
*
Barbara Marsh covers health care for The Times. She can be reached at (714) 966-7762 and at barbara.marsh@latimes.com.
