CAMBRIDGE, Mass. (
(AVEO - Get Report)
fired 140 middle and lower-level employees -- 62 percent of its workforce -- on Tuesday in order to save money to pay the salaries and bonuses of its top executives who blew up the company, decimated shareholder value and are too cowardly to accept responsibility for their incompetence.
At Aveo, accountability starts at the bottom.
"This is an incredibly sad day for Aveo," said CEO Tuan Ha-Ngoc on Wednesday's conference call.
True, but certainly not so sad for Ha-Ngoc since he keeps his job, his $567,875 per year salary, bonus and other perks. Ha-Ngoc was in charge of Aveo when it conducted a poorly designed phase III trial for the kidney cancer drug tivozanib. He was in charge when FDA raised concerns about the tivozanib study and recommended the company run another one. Ha-Ngoc kept this information from investors and ignored the FDA's advice.
Last month, an FDA advisory panel excoriated the tivozanib data and told FDA to reject the drug, sending Aveo shares plummeting by more than 60 percent. Under Ha-Ngoc's watch.
FDA is expected to follow through on the negative advice of the panel and reject tivozanib next month, Aveo concedes, which is why 140 employees have now been fired.
But Ha-Ngoc keeps his job.
"Tuan did not offer his resignation to the board. The company doesn't discuss conversations that took place in the board room, only outcomes," said Aveo spokesman Dan Budwick, when asked if Aveo's board ever considered making changes to the management team.
Only a single Aveo executive, Chief Operating Office Elan Ezickson, is leaving the company, and he's being allowed to resign nicely. Ezickson made $1 million last year.
Last week, Aveo Chairman Henri Termeer assured me that there would be
"severe consequences" for the company
stemming from the failure of tivozanib.
Am I surprised that Aveo's rank-and-file employees are bearing the brunt of this colossal cock-up?
No, of course not. When you're Termeer, Ha-Ngoc or one their C-level cronies, "sad days" in biotech are only for the schmoes who work for a living.
-- Reported by Adam Feuerstein in Boston.