More executive reshuffling at Arcturus as CSO/COO resigns

Chief Scientific Officer and Chief Operating Officer, Pad Chivukula, and former President and CEO Joseph Payne were excluded from board meetings that resulted in the latter's dismissal, Payne's attorneys claimed. (Leeroy Agency)

Arcturus Therapeutics is losing its second executive in as many weeks—Pad Chivukula, the RNA biotech’s chief scientific officer and chief operating officer, is stepping down.

Chivukula will take an advisory role with Arcturus, which headlined its announcement with the appointment of Christine Esau, previously its senior director of translational research, to the top R&D post at the company.

"It has been a privilege to be a part of the Arcturus team, and I am proud of our extraordinary innovations and accomplishments in advancing our diverse pipeline of RNA therapeutics and the many partnerships we have garnered thus far, Chivukula said in the statement. "I look forward to following the Company's ongoing success as Arcturus continues to progress its preclinical programs."

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The news comes shortly after Arcturus’ board voted to oust then-President and CEO Joseph Payne, who was replaced in the interim with Mark Herbert, the company’s VP of business development and alliance management.

RELATED: Johnson & Johnson, tiny RNA biotech Arcturus combine for hepatitis B work

Payne didn’t go down without a fight. He had his attorneys pen a letter to Arcturus, claiming that the board of directors excluded both him and Chivukula from “board discussions and votes,” which is how he, as CEO and a board member, missed the memo that he was getting fired.

The letter laid the blame on a group of four directors—Stuart Collinson, executive chairman of the board, Craig Willett, Daniel Geffken and Intercept CMO David Shapiro—who made the decision in violation of Israeli Companies Law and then “had our client physically removed from the building.” 

It also demanded Payne be reinstated in his old job, but Arcturus countered, saying he was terminated because his conduct was “contrary to the best interests of the Company and its shareholders” and that Payne had “demonstrated that he is unable to put the needs of the company and its shareholders ahead of his own self-interest.”

Arcturus backed its way onto the Nasdaq in September, through a reverse merger with Israel-based Alcobra, which, the letter alleged, is the root of “the poor corporate governance demonstrated in recent months,” that led to his ouster.