Struggling Xcyte replaces chief exec

Seattle-based Xcyte Therapies Inc. said yesterday that it has replaced founder and Chief Executive Officer Ron Berenson with a company vice president, as the struggling biotechnology company charts a new strategy that could include a merger or acquisition.

As part of this new strategy, the company is working with SG Cowen & Co., an investment bank that handles health care and mergers and acquisitions. The company has named Robert Kirkman, its chief business officer and vice president, its acting president and chief executive.

"We intend to explore all options to maximize shareholder value," board Chairman Christopher Henney said in a statement. "These options include mergers, acquisitions, sale or purchase of assets, in-licensing opportunities and out-licensing certain of our assets. While this process is ongoing, we intend to reduce the operating expenses of the company as much as possible, consistent with maintaining the value of our assets."

Alan Leong, research director for Seattle-based BioTech Monthly, said the statement, especially the phrase "as much as possible," translates into some tighter times for the company. "You know what that's a code word for?" he said. "Cut, cut, cut."

Berenson will become director of Xcellerate Research and Development and will remain on the board of directors.

Leong said the company most likely tapped Kirkman, 56, for his experience in corporate communications, a role the former associate professor at Harvard Medical School had at Protein Design Labs Inc.

"I suspect this is a move to help raise capital," Leong said. "You have a person who specializes in corporate communications. He specializes in presenting the company's story."

The past few months have been particularly tough on the company, which has about 70 employees in Seattle and Bothell.

It is focusing on its Xcellerated T Cells therapy program, which enhances the body's immune system, and its application to chronic lymphocytic leukemia.

On June 6, Xcyte received a notice from the Nasdaq stock market that it could be removed from public trading -- or "delisted" -- if the value of its common stock does not reach $1 per share, according to papers filed with the Securities and Exchange Commission.

Yesterday, in regular trading, its shares closed at 68 cents.

The company has until Dec. 5 for its stock to close at $1 per share for 10 straight business days to avoid possibly being removed from the Nasdaq.

In March, the company said it gave 26 employees their pink slips to save money. Also, the company lost $7.3 million, or 37 cents per share, during the first quarter of this year, which ended March 31, according to papers filed with the SEC.

"I think the goal is clearly to get the greatest return for our shareholders," Kirkman said. "Everything is on the table."

Kirkman said there is no timeline for implementing the new strategies. He added that Berenson selected his new role at the company, and the board is not searching for a permanent chief executive and president.

"I think that will depend on the outcome of the process that we're engaged in," he said.

P-I reporter Brad Wong can be reached at 206-448-8137 or bradwong@seattlepi.com.

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