Techniclone’s Chief Out in Bid to Revive Stock

Techniclone Inc. chief executive Lon H. Stone said he is resigning in an effort to “restore investor confidence” in the biotech company, whose stock has plummeted from about $6 to about 50 cents in little more than a year.

The company, which is developing cancer treatments, said an oversight committee of directors will manage the company’s day-to-day operations. The committee also plans to appoint an interim chief executive shortly and is continuing a search for a permanent successor for Stone.

The management shake-up is the latest jolt for a company that has struggled through drug test delays and financing troubles in the last year.

Stone had announced months ago that he intended to step down, but directors have been unable to find a successor despite a six-month search.

The stock has dropped, which was trading at $2.84 a share on Dec. 5, slumped to a low of 48 cents on Feb. 18, often on heavy volume.

Stone, who is 55, said he stepped down after agreeing with the board that shareholders might be “beating up” the company over management issues.

Stone and William “Bix” Moding, the company’s chief financial officer, blamed the stock’s deterioration in part on a $12 million private financing the company resorted to last April.

Strapped for capital, and with little options, the company agreed last spring to sell preferred stock privately that was convertible to common stock at increasing discounts six months later. The conversions in recent months diluted the value of the common shares.

The company was also disappointed in delays by its partner, Alpha Therapeutics Inc., in tests of its drug Oncolym for treating lymphoma. Techniclone recently reacquired marketing rights to the drug.

The company said Stone will remain as “nonexecutive” chairman and focus on raising financing in Europe. It didn’t elaborate.

In a statement, Edward J. Legere, head of the board’s search committee, said the company seeks a new leader to oversee clinical tests of its cancer therapies and expand its pipeline of drugs in development.

Techniclone closed Wednesday at 53 cents, off 6 cents for the day.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Techniclone’s Tumble

Techniclone’s stock, which traded in the $5-to-$6 range a year ago, has been trading below $1 since February. Monthly closing stock prices:

1997

Jan. $6.25

Wednesday’s close: $0.53

Source: Bloomberg News