New CEO takes the helm at Akari as it tries to navigate choppy waters

Former Zealand Pharma chief David Horn Solomon, M.D., has taken up the challenge of guiding biotech Akari Therapeutics during an increasingly tumultuous period.

The change at the top comes after the former CEO quit earlier this year amid a probe into the release of phase 2 data and a related analyst report. An investigative committee ruled that Gur Roshwalb, M.D., had broken company policy and found that an Akari statement had falsely claimed a patient met the primary endpoint in a phase 2 trial.

Akari convened the ad hoc committee in response to the publication and subsequent withdrawal of a report by Edison Investment Research. Edison drafted a report for Akari to describe data from a phase 2 trial of Coversin, the biotech’s rival to Alexion’s Soliris. The committee found that Roshwalb reviewed and approved the Edison report. One day after publication, Edison pulled the report after learning it contained "material errors."

At that time, Akari pointed investors to its own press release for an accurate write-up of the data. But it has now emerged that the errors extend beyond the Edison report.

Akari framed Roshwalb’s recent decision to resign as a consequence of him having contravened company policy by reviewing and approving the Edison report. The analyst report claimed the phase 2 data showed Coversin was a match for ultrarare (and ultracostly) Soliris, a statement that looked flimsy even before Akari revealed one of the five patients missed the primary endpoint.

With Roshwalb quitting, Executive Chairman Ray Prudo, M.D., served as acting CEO. Now Solomon, who was CEO of European diabetes biotech Zealand Pharma from 2008 to 2015, takes the reins and will have a lot in his in-tray.

When Akari unveiled the phase 2 data, it set its sights on getting Coversin into phase 3 by the end of the year. Akari began 2017 with $44 million, but the slide in the company’s stock price has diminished its ability to add to that pile. And it is subject to two class action lawsuits that could distract it and eat into its cash reserves. Akari has said it plans to "vigorously defend" itself against the lawsuits.

Unsurprisingly, the biotech decided not to go into these troubles in its release but instead focused on the future and its new leader.

"I am very pleased that David will be joining Akari and that we have been successful in attracting a person of his caliber and with over 20 years of leadership experience in the biotechnology industry," said Prudo. "David has a strong track record of leading phase 2-stage companies like Akari, most notably at Zealand Pharma where he led the development of lixisenatide, which is now commercialized by Sanofi."

"I am excited by Akari’s growing and diversified discovery platform and its clinical programs in the complement mediated diseases, PNH (paroxysmal nocturnal hemoglobinuria) and aHUS (atypical hemolytic uremic syndrome)," added Solomon. "I believe Akari’s lead compound, Coversin, with its dual binding sites also has potential in a wide range of other diseases where both the complement and leukotriene pathways are implicated including atopic keratoconjunctivitis in the eye and bullous pemphigoid in the skin. Akari is building momentum in its research programs and this is a hugely exciting time to join and help advance its products."

Back in 2015, Deerfield Management led a $75 million round for Akari, which was created out of Celsus Therapeutics' recent acquisition of Volution Immuno Pharmaceuticals SA. The microcap biotech had a market cap of just $44 million as of last Friday.