Bioniche CEO moving to consulting role

Bioniche (ASX:BNC) is set to appoint a new CEO and board, after resolving a dispute with disgruntled shareholders that had threatened to derail a planned sale of the company’s animal health and food safety businesses.

The Canadian dual-listed company announced in May that it plans to sell off its animal health division. The company is also pursuing a sale of its newest business unit, One Health, which focuses on developing products to treat diseases in livestock that may impact human health.

Bioniche will be left with its human health business, including the division’s lead asset, bladder cancer treatment Urocidin. Resources from the sale will be used to support Urocidin development.

Bioniche founder and CEO Graeme McRae will accordingly be stepping down from the top job once a replacement is found, but he won’t be leaving the company altogether.

In an open letter to shareholders sent out yesterday, McRae revealed plans to take the non-voting role of chairman emeritus of the company’s board. He will also take the role of a consultant under contract from the company.

Also yesterday, Bioniche announced a planned thorough board shake-up as part of a settlement with dissident shareholders.

William M Wells and Greg Gubitz had been mounting a protracted proxy dispute due to concern over the sale of the animal health business. The shareholders had been pushing to have the company instead retain its animal health business and sell the rest of the company’s assets.

But the parties have now reached a settlement agreement under which the shareholders have agreed to cease their activism for at least two years. The settlement involves a transformation of the board.

Gubitz will join the board as a non-executive director, while Wells will join the board’s corporate governance and monitoring committee.

Upon the company’s annual general meeting in November, the board will be reduced to seven members and a new slate of directors will be nominated for election.

The slate will include Gubitz, two current directors - James Rae and Rod Budd - and three yet-to-be-selected independent directors who have never served on the board before.

Wells and Gubitz have meanwhile agreed to support the sale of the animal health business, subject to a minimum price, and to invest $250,000 in the company’s current prospectus offering.

Bioniche (ASX:BNC) shares were trading unchanged at $0.38 as of around 1 pm on Thursday.