Gilman Wong Photo Michele MOssopFri 14th October 2011Gilman Wong CEO of Sirtex seen here at St Vincent’s hopsital Sydney with the micro tech SIR microspheres which treats liver cancer without the need for surgery.The board of Sirtex found it “very difficult” to let go of its former chief executive, Gilman Wong, who is being investigated over trades he made in the troubled biotechnology group’s shares ahead of a profit downgrade.
But it was a “decision that had to be made”, says outgoing chairman Richard Hill.
Addressing the company’s annual meeting on Tuesday, Mr Hill acknowledged it was a “tumultuous year for Sirtex” but said the board was committed to “achieving the highest standards of corporate governance”.
The company’s share price has been volatile over the past 12 months following a run of bad news. It was down 1.7 per cent on Tuesday late morning at $13.88. This compares to its December 2015 peak of $41 a share.
Following a number of unsuccessful clinical trials, the company in December downgraded sales growth forecasts for its microspheres, which are used to treat some cancers.
Mr Wong was sacked last year after an internal board investigation into his share trading last October.
“It was, understandably, a very difficult decision for many of us on the board to make – at a personal level – having worked closely with Gilman over the past 12 years – however, it was a decision that had to be made and we made it,” Mr Hill said.
The n Securities and Investments Commission (ASIC) is now investigating Mr Wong’s $2 million of share trades at the time as possible insider trading. Mr Wong has denied any wrongdoing.
Sirtex in September paid a penalty of $100,000 after allegedly breaching its continuous disclosure obligations to shareholders, but without any admission of liability after being issued with an infringement notice from ASIC.
Separate to the ASIC investigation, the company is facing a class action over alleged breaches of its continuous disclosure obligations.
Sirtex would be “vigorously defending the proceedings”, Mr Hill said. The Federal Court has ordered mediation by the end of August next year and a three-week trial will start in late October next year.
Sirtex’s new CEO, Andrew McLean, told the meeting there was “significant growth potential” for its technology.
“It works, it extends the lives of people with liver cancer and yet we have just an approximate 5 per cent penetration of the accessible market,” he said.
Sirtex was now focused on a program in the United States – a market which makes up about 80 per cent of the company’s business – to reduce the time it takes for doses to get to customers.
It was also piloting a program with a key US institution to ensure faster implantations. And, keeping in line with a new trend in America of moving healthcare outside hospitals, the company was trialling Office Based Laboratories across the US, with a small number of patients treated off site so far.
Next year greater revenue is coming from Canada, Brazil, France and Spain. But China and Japan were “longer-term initiatives” since registration and entry requirements were more time-consuming in those countries.
Mr McClean said sales revenue for the first quarter of 2017/18 fell 5 per cent as a result of adverse currency movements, while dose sales remained flat.
But there were “some early favourable results”. “We knew that Q1 was going to be difficult emerging from the distracting events of last year,” he said, but those events were now “largely behind us”.
The majority (87.75 per cent) of shareholders accepted the company’s remuneration report.
Its interim chief executive, Nigel Lange, who stepped in after Mr Wong’s departure, will get $740,000 per annum including superannuation contributions, which is 19 per cent less than Mr Wong’s 2015/16 base remuneration of $875,695 salary plus $33,305 in superannuation.
Mr McLean, who took over in May, gets total remuneration of $885,184.
The hunt for a new chairman is now under way following Mr Hill’s retirement.
Mr Hill has in previous years come under fire over the lack of women on the company’s board.
In September Helen Kurincic was appointed a non-executive director, making her the second woman on the board following former AVCAL CEO Dr Katherine Woodthorpe joining in 2015.
Ms Kurincic has over 20 years of direct executive and board experience in healthcare. She is also chairman of Integral Diagnostics Limited, and a non-executive director of Estia Health and of HBF Health Limited.