Co-Founder Of Digene Joins Partner In Leaving. Check it out:
(Newsbytes Via Thomson Dialog NewsEdge) Sixteen years ago, Evan L. Jones and Charles M. Fleischman -- two college buddies from the 1970s -- founded a small biotech company called Digene Corp., sometimes paying the bills with their own checkbooks. Today, the Gaithersburg company is worth nearly $1 billion.
Soon, both founders will be gone.
Fleischman resigned yesterday as president, chief operating officer and chief financial officer, effective in October, saying he could not stay at the company without running it. His resignation came two months after Jones said he would retire within the next year as chief executive and indicated his partner would not succeed him.
"If am not going to be in charge, then I am going to do something else," Fleischman said in an interview yesterday. "I am going to find someplace else where I can contribute mightily to this world."
Digene shares closed yesterday at $42.68, down $4.75, or 10 percent.
Joseph P. Slattery, a senior vice president at Digene, is to become chief financial officer. The firm, which is still searching for a chief executive, said it was not considering filling Fleischman's other roles.
Fleischman, 48, is also leaving Digene's board and said his decision marks a bittersweet moment for him and the company, further signaling its transition from a start-up to an established, profitable enterprise, and one that might need different skill sets than he or Jones offers.
Digene sells a test for a virus that can cause cervical cancer. Fleischman acknowledged that for the company to grow, it would have to expand internationally and produce new products, possibly by buying other companies.
"As you look for the next generation in leadership, you would look for those skill sets," Fleischman said.
Analysts were not surprised at Fleischman's decision, particularly because it had become clear that the firm would look outside for a new chief executive. Matthew Scalo, an analyst with Canaccord Adams Inc., went so far as to refer to him as the "jilted CFO."
"Evan Jones and Chuck Fleischman joined the company together and have run it as partners for over a decade now," said Amit Hazan, an analyst with SunTrust Robinson Humphrey Capital Markets. "So Chuck was never second to anyone. They ran this together."
Hazan, who does not own stock in Digene and whose firm does not have an investment banking relationship with the company, said he was confident that Fleischman's resignation was not related to anything negative about the company.
The company recently reported fiscal fourth-quarter profit of $3 million (13 cents per share), compared with a loss of $3.8 million (19 cents) in the corresponding period last year. Revenue increased 33 percent, to $43.3 million, for the quarter ended June 30. For the year, net income was $8.4 million (38 cents), compared with a loss of $8.2 million (41 cents). Revenue increased 33 percent, to $152.9 million.
Fleischman is to receive severance payments under a separation agreement he negotiated with Digene. Terms were not released. Fleischman owns about 30,000 shares, or 0.13 percent of the firm's outstanding shares. He also owns 6.1 percent through a private partnership with Jones.
Of his departure, Fleischman said: "What am I going to feel? Incredibly proud. Very enthusiastic. Extraordinarily pleased and happy -- all of that combined with the bittersweet nature of change."
2006 The Washington Post Company
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