High-ranking Vertex exec fired over code of conduct violations
UPDATE: Jan. 28, 2019: Infinity Pharmaceuticals and Acorda Therapeutics have each disclosed via regulatory filings that Ian Smith has resigned from their respective boards of directors.
- Vertex Pharmaceuticals has fired chief operating officer and interim finance head Ian Smith for "personal behavior" that violated the company's code of conduct, cutting ties with the veteran executive after a "prompt and comprehensive" investigation.
- Paul Silva, Vertex's controller, will take Smith's place as interim chief financial officer and the company says it is conducting a formal search to select a permanent CFO. Vertex's previous CFO resigned last month.
- "At Vertex, we are deeply committed to our culture of diversity, inclusion and respect, and we insist that all of our employees, regardless of their seniority, live our values and adhere to our Code of Conduct," said Vertex CEO Jeffrey Leiden, in a Jan. 23 statement. Smith's departure was unrelated to the company's finances and business, Vertex said.
Vertex appears to have moved quickly to terminate Smith, who joined the company in 2001 and held the role of chief financial officer for 15 years before switching over to the operations side of the business in Jan. 2017.
Over that time, Vertex grew from an upstart biotech focused on hepatitis C and HIV research into one of the premier companies in the sector with a market-leading portfolio of cystic fibrosis medicines.
Vertex first learned of allegations regarding Smith's behavior within the last month or so, a spokesperson for the company told BioPharma Dive, noting the company doesn't plan to share further details beyond what's disclosed in Wednesday's statement.
"Smith was well known to investors and had been a fixture at the company for more than 17 years, and in our view had in many ways been the architect of the company’s financial performance and success," wrote Leerink analyst Geoffrey Porges in a Jan. 23 note to investors.
Vertex emphasized repeatedly that Smith's termination was unrelated to the company's business progress. Still, his exit leaves the company with two vacancies in its executive team in an important year for the company's drug pipeline.
"Investors will be alarmed by this surprising news and while it is a disappointing turn of events for the individual, and the company, we do not expect it to result in further terminations or any change in the company’s prior or future financial results or reporting," Porges added.
Shares in Vertex dipped by about 2% in post-market trading Wednesday evening.
Prior to his firing, Smith sat on the boards of directors of two other biotechs, Infinity Pharmaceuticals and Acorda Therapeutics. In the days following Vertex's announcement, each company disclosed via regulatory filings that Smith had resigned from their respective corporate boards.
Vertex still plans to release fourth quarter financial results as scheduled on Feb. 5 after markets close.
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