UPDATED: Advanced Cell CEO is out
Marlborough-based Advanced Cell Technology announced today that CEO Gary Rabin is leaving his position, and his seat on the company's board of directors, effective immediately.
Board members for the clinical-stage biotechnology company have appointed Edward Myles, the company's chief financial officer and executive vice president of corporate development, interim president, as they launch a search for a permanent replacement. They also voted to reduce the size of the board from six to five members following Rabin's departure, according to SEC filings.
“The board appreciates the work that Gary did to stabilize the company since he became CEO in December 2010. We have initiated a CEO search and are very confident that Mr. Myles (and others) will continue to move the company forward towards the achievement of its long-term goals,” Board Chairman Michael Heffernan said in a statement.
News of Rabin's departure comes three weeks after Advanced Cell agreed to pay $4.1 million over the next 18 months to settle claims by the U.S. Securities and Exchange Commission (SEC) that the firm sold billions of shares of unregistered penny stocks.
Advanced Cell, which didn't admit or deny the allegations, will pay $3.5 million in profits it allegedly gained, as well as interest of $586,619, according to a judgment issued by a U.S. District Court judge in Florida. The alleged violations pre-date Rabin's tenure as CEO at Advanced Cell, occurring in late 2008 and early 2009 under former CEO William Caldwell IV, who died in 2010. But Rabin was a member of the company Board of Directors at the time.
An 8-K filed with the SEC on Dec. 23, 2013 said another SEC investigation was prompted due to Rabin's failure to report 27 transactions in which he sold shares of the company's common stock between February 2011 and January 2013. The company said Rabin reported the transactions in April 2013 in a delayed Form 4 filing with the SEC. The Advanced Cell board investigated the matter and was advised that the SEC was also conducting an investigation, according to the company.
A spokesman for Advanced Cell called Rabin's departure a "mutual decision."
The company, which is in the middle of three clinical trials, lost $5.7 million in the third quarter of 2013 and had just $4.9 million cash on hand.
Myles said in Wednesday's statement that the company's core programs that treat macular degeneration “continue to progress according to plan, and we expect to release interim, top-line data from the trials in the very near future.”
(UPDATE: An earlier version of this story reported that Advanced Cell allegedly sold billions of shares of unregistered penny stocks before Gary Rabin's tenure with the company. Rabin was a member of the board of directors when the alleged violations took place, though he was not the CEO.)
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