The Story Behind Sarepta's Firing of its Top Scientist
Let's talk about Sarepta Therapeutics (SRPT - Get Report) and the firing of Chief Scientific Officer Art Krieg. The company announced Krieg's "termination" Thursday in an 8-K filed with the Securities and Exchange Commission but offered no explanation.
The good news: Krieg had no role in the clinical development of eteplirsen, Sarepta's lead Duchenne muscular dystrophy therapy. Krieg wasn't involved with the eteplirsen approval filing or discussions between Sarepta and the FDA. Krieg's firing has nothing to do with eteplirsen, according to two sources familiar with the situation. [Both would not speak on the record.]
The bad news: Krieg was hired last January to run Sarepta's drug discovery and early-stage research programs. But seven months later, Sarepta's effort to bring new drugs into the clinic has fallen behind schedule. Last January at the J.P. Morgan Healthcare Conference, Krieg shared the stage with CEO Chris Garabedian. Both men promised to accelerate the company's RNA therapeutics platform, so that Sarepta was not just about eteplirsen. Those promises have not been kept. I'm told there's been significant disagreements within Sarepta's executive team about strategy and the pace of the work on new exon-skipping drugs. The result: Krieg is gone.
Sarepta would not comment beyond what was stated in the 8-K filing.
It's not fair to blame one guy for Sarepta's slow pace. Garabedian hired Krieg so he needs to shoulder a lot of the responsibility for the inability of the company to move new drugs quickly into the clinic, as promised. Krieg is not the only Sarepta employee to leave, which reinforces the whispers you hear about Garabedian being a tough CEO to work for.
And while we're discussing rumors, there's the one -- unconfirmed -- about Krieg going to Sarepta's board in an attempt to unseat Garabedian as CEO.
Srpt: word is that it was a failed bid to replace CG and become CEO. Board stuck with CG. AK then immediately terminated.— stockerjocker (@np32817) July 24, 2014
I don't know if the Krieg coup rumor is true, but it does fit in with what I heard about fights between Sarepta's top executives over strategy. And while executives leave companies all the time, the announcements are usually couched with more nuance. Executives resign to spend more time with their families or to pursue new opportunities. It's relatively rare for a company to disclose that an executive was "terminated." When this happens, the board is usually involved, so maybe there is something to the coup rumor.