said Myrtle Potter, the president of commercial operations, is leaving that role and will serve as a consultant to the company.
Effective immediately, Ian Clark, senior vice president and general manager of bio-oncology, is being appointed senior vice president of commercial operations. Clark will be the head of the commercial organization and will join Genentech's executive committee.
In a regulatory filing, the biotech company said the agreement with Potter became effective on Aug. 10. Her status as a consultant will continue until Sept. 30, 2006, unless it's terminated before then in accordance with the terms of the agreement she and Genentech reached.
The agreement said that both sides "have decided it is in their mutual interest" to enter the pact. Included in the regulatory filing was a memo from CEO Arthur Levinson to Genentech's staff, which indicated Potter "has been out of the office for the last several months, attending to her health."
Levinson's memo continued, reading, "Myrtle and I have discussed that given Genentech's rapid growth, the Commercial organization needs full-time leadership."
Potter joined Genentech in 2000 as executive vice president and chief operating officer and oversaw the launch of Avastin, Raptiva, Xolair, Nutropin AQ Pen, Cathflo Activase and TNKase. In March 2004, she was named president of commercial operations.
Clark joined Genentech in January 2003.
Genentech was required to pay Potter $1.2 million within five days of Aug. 10, and the company also agreed to pay her $101,333 for each month of her consultancy. In addition, for any consulting services that exceed 20 hours for a month, Genentech will pay Potter $500 an hour. In 2004, Potter's salary, at $1.8 million, was topped only by Levinson's $2.2 million.
If there is a "substantial breach" of the agreement, Potter can end her consultancy and be entitled to receive $1.2 million, minus the aggregate amount of the $101,333 monthly payments already made. She can also have all then-outstanding unvested options that would vest by Sept. 15, 2006, become vested.
Should Potter take employment after March 31, 2006, with any other organization for which she receives compensation of $500,000 or more on an annualized basis, Genentech will pay her $1.2 million, again reduced by the number of monthly payments already made, but all outstanding unvested stock options will be cancelled.
The filing also indicates that Potter and Genentech "each waives certain causes of action against each other." Potter's outstanding stock options will continue to vest and be exercisable during her time as a consultant.