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Alkermes chief executive suddenly leaves Cambridge biotech company

Sales of Vivitrol, an injectable drug made by Alkermes to treat alcohol dependence, have been disappointing. Sales of Vivitrol, an injectable drug made by Alkermes to treat alcohol dependence, have been disappointing. (Photos By Pat Greenhouse/Globe Staff/File 2009)
By Robert Weisman
Globe Staff / September 12, 2009

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Cambridge biotechnology company Alkermes Inc., which has suffered a string of setbacks this year, yesterday said its chief executive has abruptly left after two years on the job and is being replaced by its board chairman.

In a terse statement, the company said David Broecker “has resigned, effective immediately’’ from his roles as president, chief executive, and a director of Alkermes, which makes drugs to treat alcoholism, depression, and other diseases. No reason was given for Broecker’s exit. He will be replaced by chairman Richard Pops, former chief executive of Alkermes.

Company spokeswoman Jennifer Snyder yesterday said Broecker was no longer in the building and Pops would not be available for comment. Broecker quit “to pursue other opportunities and the board felt Richard was the right person for the current role,’’ Snyder wrote in an e-mail. “David did not resign due to any disagreements with Alkermes.’’

In a required filing with securities regulators yesterday, Alkermes said Broecker will walk away with a $1.1 million severance payout. The company also continued Broecker’s benefits, accelerated the vesting of his stock options and restricted stock, and extended the time to exercise and the expiration date of the stock options.

Shares of Alkermes edged up 7 cents, or 0.74 percent, to $9.48 on the Nasdaq exchange yesterday. Its stock price has retreated by nearly a third over the past year, from a high of $13.71, as several partners abandoned alliances with the company.

Last year, Alkermes said it would cut 150 jobs and close a Chelsea manufacturing plant after Eli Lilly & Co. dropped out of a joint venture to market inhalable insulin as an alternative to injections.

Cephalon Inc., a biotech company that controlled US marketing rights for Vivitrol, an Alkermes injectable drug to treat alcohol dependence, ended their partnership in December, leaving Alkermes solely responsible for selling the drug domestically. Sales of the novel treatment - patients receive monthly injections to curb their craving for alcohol - have been disappointing. And last month, some units of health care products goliath Johnson & Johnson pulled the plug on a joint venture with Alkermes to develop a four-week version of the antipsychotic drug Risperidone.

The declining stock price may have been a factor in Broecker’s departure from Alkermes, said David Windley, senior analyst with investment banking firm Jefferies & Co. in Nashville. But he also noted that Pops, who built the company over a 16-year tenure, stayed active in the operation even after relinquishing the chief executive’s reins in 2007.

“Richard has remained an executive chairman, coming into work every day and representing the company’’ before trade groups and other outside constituencies, Windley said. “It may have been a recognition that Alkermes didn’t need two people in that role.’’

Alkermes, like other biotechs, has been feeling the squeeze over the past year as drug development projects have slowed and financing has been harder to come by. Seeking cost savings, the company said in April it will be moving out of its Cambridge headquarters to cheaper space in suburban Waltham by early next year, hoping to trim annual expenses by $8 million.

In a note to investors yesterday, Bert Hazlett, analyst for financial services firm BMO Capital Markets in New York, said Broecker faced obstacles during his two-year tenure at Alkermes.

“Mr. Broecker was in a challenging position at Alkermes when he assumed the role of CEO in April 2007, with its primary product development and commercialization efforts largely in the hands of partners,’’ Hazlett wrote, “and the struggling commercialization of alcoholism therapy Vivitrol was playing out. We believe Mr. Pops’s presence as chairman of the Alkermes board of directors also cast a long shadow.’’

Pops, 47, who took Alkermes from a privately held firm to a publicly traded company, served as its chief executive from February 1991 through April 2007, when Broecker took over. Pops is also a past chairman of the Biotechnology Industry Organization, known as BIO, a national and global trade association.

In the company’s statement, Pops said Broecker leaves Alkermes “in a strong position.’’ He added, “I look forward to leading Alkermes as we develop medications that result in value to patients, as well as to our shareholders, in the years to come.’’

Robert Weisman can be reached at weisman@globe.com.