(Bloomberg) -- It was hard to tell who is running things over at Rockwell Medical Inc. Wednesday morning.
The small-cap dialysis drugmaker said Chief Executive Officer Robert Chioini had been terminated, effective immediately, but Chioini appears to disagree, as a conflicting statement appeared in a filing bearing his signature earlier today. Minutes later, Rockwell Chairman Benjamin Wolin released a statement in a separate filing saying Chief Financial Officer Thomas Klema had also been terminated for his conduct after Chioini’s firing.
It may be a wish come true for Rockwell’s top holder, Richmond Brothers Inc. The firm, which owns a 10 percent stake, according to data compiled by Bloomberg, has been pushing for Chioini’s ouster and changes to the board to reignite the company’s pipeline and sales growth. Rockwell Medical has lost about 30 percent of its value since late September as the commercial release of its vitamin D injection, Calcitriol, faced several delays and its Triferic iron replacement therapy failed to reach a full commercial launch.
The company said earlier this month that a new manufacturing submission on Calcitriol would be submitted to the Food and Drug Administration no later than August 19. Rockwell expected an inspection of its contract manufacturing organization’s lab partner on June 25.
Chioini, who founded Rockwell Medical and owns a 4.9 percent stake, said in the first filing that he plans to remain at the head of the company. He says the board vote shouldn’t be considered valid since it wasn’t the stated purpose of the special meeting, which had been called to discuss a letter from an unidentified shareholder alleging some board members of breaching fiduciary duty. According to Wolin’s statement, the board has named Wolin, Lisa Colleran and John Cooper as a special transition committee to oversee the company’s “strategic direction” while a new chief is sought.
The company later released a letter to investors on behalf of Chioini, who continues to act as CEO and has instructed Klema to remain in the CFO role, saying it’s not clear if Klema’s termination complies with governance requirements. Meanwhile, an investigation has begun into the shareholder letter alleging fiduciary breaches, Chioini said.
Chioini’s knowledge of the dialysis market and industry players “will be very hard to replace,” IFS Securities analyst David Bouchey wrote in a note to clients. Still, he expects holders will likely side with the board. Calcitriol negotiations as well as Triferic commercialization efforts are likely to continue as long as Chief Medical Officer Raymond Pratt remains with the team. “He has our complete confidence,” Bouchey said.
Rockwell shares rose in pre-market trading in New York before they were halted at 9:23 a.m. The Securities and Exchange Commission declined to comment on the matter. Neither Rockwell Medical, nor its external communications team, returned voicemails seeking comment. Chioini couldn’t be reached for comment.
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