In an astonishing development, Donald L. Drakeman, founder and CEO of Medarex Inc., has lost his job. Medarex announced on Monday, November 6 that Drakeman had resigned because of a pending Sarbanes Oxley investigation. Michael A. Appelbaum, the CFO, also resigned.

Irwin Lerner, board chairman since 1997, is Medarex’s interim president and CEO, and a search is underway for a permanent CEO. Lerner, a Rutgers graduate, was CEO at Hoffman-La Roche from 1980 to 1992.

The 2002 Sarbanes Oxley act pointed a spotlight on various accounting practices, including whether companies correctly reported the dates for when their executives exercised their stock options and whether they took an appropriate compensation charge. In a press release Medarex said that, over a six-year period, the company had dated stock option grants and restricted stock grants “as of dates on which the stock price was relatively low, without disclosing the selection in its public filings and without taking a compensation charge.”

The Securities and Exchange Commission began making an informal inquiry last May, and the United States Attorney’s Office has issued a grand jury subpoena. The board is conducting an internal investigation. After reviewing more than 3.5 million pages of documents and interviewing more than 50 people, it did not find evidence of fraud or willful misconduct. The board continues to evaluate civil claims and is in the process of restating five years of financial reports.

Medarex is far from the only firm to wilt under the harsh lights of a Sarbanes-Oxley investigation; nearly 100 companies are under federal scrutiny. “Since the advent of Sarbanes-Oxley in 2002, many public companies are looking at the business process (or practices) associated with the granting of stock options and are expanding their review to the entire methodology associated with the compensation process,” says Tom Basilo, CEO of WithumSmith+Brown Global Assurance on Vaughn Drive.

The Medarex board met on Sunday, November 5, and issued the press release announcing the departures on Monday, November 6.

Though Medarex says it found no evidence of wrong doing, it is a sad chapter in the life of any company when its founder leaves under a cloud.

Donald Drakeman, 52, founded Medarex in 1987. Thanks to him, Medarex owns the rights to the only “fully human” mouse in the world, a mouse that reacts genetically like a human, which makes it extremely valuable for developing fully human antibody-based therapeutics to treat such diseases as cancer, inflammation, autoimmune disorders, and infectious diseases. More than 30 of its products, some developed with partners, are in clinical trials. For the federal government, it is developing countermeasures against bioterrorism. The day after the resignation was announced, the interim CEO announced yet another partnership.

Until now Drakeman has looked squeaky clean. He is the current chairperson of the New Jersey Commission on Science and Technology; he was formerly the chair of the Biotechnology Council of New Jersey, and last year he won the Ernst & Young entrepreneur of the year award. Both he and his wife, Lisa Drakeman, who is CEO of her own company, GenMab, on North Harrison Street, earned their PhDs in religion from Princeton University.

A Dartmouth College graduate, Drakeman also has a law degree from Columbia University, and he teaches the constitutional law at the university. He is also a director of IDM Pharma Inc., a publicly traded biopharmaceutical. At Medarex this year he earned $817,950 in salary and more than $335,000 in bonuses.

“Don is a wonderful contributor to the industry in New Jersey. He was stellar chairman of BCNJ and has continued to contribute to BCNJ,” says Debbie Hart, president of BCNJ.

“Both Don Drakeman and Mike Appelbaum greatly advanced the company’s mission of doing vital research aimed at developing human antibody-based therapeutics to treat life-threatening and debilitating diseases and have helped position the company for continued success,” said Lerner in a press release. “But given the issues that have been raised in recent months, the company, Dr. Drakeman, and Mr. Appelbaum have agreed that the best way for Medarex to put those issues behind it and to remain sharply focused on its vital mission is for Dr. Drakeman and Mr. Appelbaum to step down.”

Blogs and message boards speculate about a takeover by a major pharmaceutical firm, but the stock rose on the news. A Medarex spokesperson refused to make any additional comment on behalf of the company, Drakeman, or Appelbaum.

Medarex (MEDX), 707 State Road, Princeton 08540; 609-430-2880; fax, 609-430-2850. Home page: www.medarex.com

Management Moves

Voxware Inc. (VOXW), 168 Franklin Corner Road, Suite 3, Lawrenceville 08648; 609-514-4100; fax, 609-514-4101. Home page: www.voxware.com

Another high-tech CEO is out of work. Thomas J. Drury, CEO of Voxware for more than two years, has resigned. A venture capitalist who had success with Sensar Inc., the Moorestown-based biometrics company that spun off from Sarnoff Corporation, he took over from Bathsheba J. Malsheen in 2004.

The new CEO, Scott Yetter, had been the company’s vice president for sales and marketing for North America. Yetter, a 1983 Georgia Tech graduate, came to Voxware in August. He had had senior positions at Katalyst Venture Partners, president of MediaDVX, Impresse, and American Software.

Founded by Michael Goldstein in 1993, Voxware’s current business is integrated voice-based solutions for distribution and logistics operations.

Abbott Buys Kos

Less than two years after it moved from Miami to Cranbury, Kos Pharmaceuticals Inc. has been purchased by Abbott Laboratories. Kos has leading cholesterol drugs, and on November 6 Abbott announced it will pay $3.7 billion to get a larger share of the cholesterol-treatment market.

The majority shareholders at Kos have agreed to take $78 per share in cash from Abbott. Kos shares closed on Friday at $50.09, so Abbott will pay a premium of nearly 56 percent.

Kos is a fast-growing specialty pharmaceutical firm that markets Niaspan and Advicor for cardiovascular patients and Azmacort for asthma patients. In 2005 it moved from Florida to 90,000 square feet at Cedar Brook Corporate Center in Cranbury, where it has 185 employees plus an additional 190 workers in Edison and 300 in Florida, plus 800 salespeople nationwide.

Headquartered in Illinois, Abbott has more than 65,000 employees in more than 100 facilities worldwide (www.abbott.com). Its pharmaceutical products and medical products (including diagnostics, devices and nutritional products) are sold in more than 130 countries.

The pipeline at Kos was attractive to Abbott, says Melissa Brotz, Abbott spokesperson. “Abbott has a significant glucose monitoring business, and Kos is developing an inhaled version of insulin, and its diabetes nutritional, Glucerna, will complement our growing diabetes business.”

Positioned as a David among the Goliaths of the pharmaceutical firms, Kos was girding itself to do battle with Merck in marketing niacin-based products. Niaspan and Advicor boost HDLs, and it was working to develop Simcor, a combination of Niaspan and Zocor, Merck’s pill that cuts bad cholesterol. Abbott will be in a better position to market Simcor because it has its own lipid management drug, Tricor, which lowers triglycerides.

Earlier this year some speculated that Kos would be bought by Schering-Plough. The founder of Kos, Michael Jaharis, had sold his previous company (Key Pharmaceuticals) to Schering Plough for $836 million in 1986. He started Kos in 1988, naming it after the Greek island where Hippocrates founded the science of medicine and where Da Vinci did his medical drawings.

Key’s former head of R&D, David Bova, had come up with the idea of Niaspan, derived from Vitamin B, and also known as niacin, which is sold over the counter but not well-tolerated. It is well tolerated and is considered the most effective drug for increasing “good” cholesterol with minimal side effects.

Kos did not intend to get sold when it moved here, according to its current CEO, Adrian Adams. “It is certainly not our plan to build ourselves for sale,” he said then (U.S. 1, March 20, 2005). “We are not a generic. We would be proud to be a highly successful specialty pharma, like Forest Pharmaceutical. What we are keen to do now is increase.”

Kos did not return reporters’ calls about whether the company would stay in Cranbury and whether Adams would keep his job.

Kos Pharmaceuticals (KOSP), 1 Cedar Brook Drive, Cedar Brook Corporate Center, Cranbury 08512; 609-495-0500; fax, 609-495-0920. Adrian Adams, president and CEO. Home page: www.kospharm.com

Stock News: McCourt Has ‘Blank Check’

Granahan McCourt Capital LLC GHN, 179 Stony Brook Road, Hopewell, Box AQ, Princeton 08542; 609-333-1200; fax, 609-333-1210. David C. McCourt, chairman. Home page: www.granahanmccourt.com

Apparently investors are willing to bet on what David McCourt will do next. The founder and former CEO of the telecommunications company RCN took his investment firm public in an unusual way. It’s called a “blank check” stock, meaning that the buyers of this stock have given McCourt carte blanche to find good deals.

The firm went public as a blank check company, otherwise known as a blind pool company or a special purpose acquisition corporation. The October 18 initial public offering, on the American Stock Exchange, could gross $90 million. Deutsche Bank was the underwriter for 11,250,000 units at priced at $8 per unit.

Granahan McCourt makes investments of $500,000 to $15 million with a 2 to 4-year horizon. The company is in a quiet period but, according its website, “McCourt has built, bought, and sold 10 companies in this related space over the last 25 years and has long been recognized as a transformational force in the telecommunications and media industries.”

RCN moved to the Carnegie Center from Wilkes-Barre, Pennsylvania, in 1994, when it was known as C-Tec, and, under McCourt’s high-profile leadership, rode the dot-com wave but filed for Chapter 11 bankruptcy in 2004.

McCourt’s original application, on July 26, was for $125 million to make investments in broadband. On the firm’s board of directors are former CIA director George Tenet, former ESPN chief Roger Werner, and Starwood Hotels and Resorts founder Barry Sternlicht. The company is named after an Irish castle owned by McCourt.

Crime Watch

John Torkelsen, the former venture capitalist and securities expert for Milberg Weiss, is in the national news again. Last summer Torkelsen, 61, began to serve a 70-month federal prison term for felony charges, and according to the November 13 issue of Fortune magazine, he was moved from a prison in West Virginia to a detention center near the Los Angeles courthouse.

Fortune writer Peter Elkind has been following the legal problems of Milberg Weiss and in his article, entitled “The Law Firm of Hubris Hypocrisy & Greed,” he poses the question of what will happen to the federal case if Torkelsen turns state’s evidence.

Torkelsen’s transfer might suggest that he had cut a deal, or that he is being pressured to make a deal, Elkind suggests. “Torkelsen’s refusal thus far to do so may come from a belief that Milberg did nothing wrong, or maybe it’s loyalty,” writes Elkind. “While Weiss officially issued a firm wide ban on using Torkelsen as an expert after bailing him out of a previous financial mess during the 1990s, records seized from Torkelsen’s office by the FBI show him listing Milberg Weiss as one of his ‘major clients’ in November 2001, with work ‘in progress’ on six cases. The firm continued using his services even after he came under criminal scrutiny.”

According to Justin Sheck of the Law Journal, “prosecutors risk judicial upset if they don’t file additional indictments (in the Milberg Weiss case) by the end of the month.”

New in Town

US Fiduciary, 344 Nassau Street, Princeton 08540. 609-921-8004; fax, 609-921-8804. George B. Wislar, senior managing director. www.usfiduciary.com

George Wislar has opened a branch of US Fiduciary LP, a boutique financial services firm, in the Mazotas building on Nassau Street. Based in Chicago, the firm serves high-end investment advisors and their high net worth and institutional clients.

Wislar was born and raised in Princeton; he was one of six children, and his father was in the insurance industry. After graduating from the University of Massachusetts in 1984, he went into the securities industry, working first at Laidlaw Adams & Peck and then for Paine Webber, which became UBS Financial Services at 100 Princeton Overlook.

Except for estate liquidation, virtually all of his business is fee-based. As a registered investment advisor, he handles 100 percent of the client’s assets. Wislar says he thinks of himself as a financial concierge, coordinating the work of, for instance, the tax accountant, the estate attorney, and/or the senior care specialist. The custodian of his clients’ stock accounts is a division of Fidelity, National Financial Services.

“I had spent more than a year searching for the perfect fit,” says Wislar. “I wanted a firm that shared my core value: advice (not selling), and putting the client first.”

New Agency

For Speakers

Thomas Neilssen likes people who put forth big ideas, who can provoke a dialogue on the future of the country. He has co-founded a new speakers agency, BrightSight Group which has taken space on Wall Street at Research Park.

“We represent a select group of thought leaders who have big ideas, and we connect them to businesses who are looking to understand and immerse themselves in these issues,” says CEO Neilssen, citing, in particular, technology or the future. The agency books speakers for universities, corporations, and associations for conferences, executive briefings, and consulting and advising projects.

Its talent lists includes authors Francis S. Collins (The Language of God: A Scientist Presents Evidence for Belief), Sam Harris (The End of Faith), and Clyde Prestowitz (Three Billion New Capitalists) as well as opinion leaders like Bill Schneider, the political “trend-meister;” Robyn Waters, founder and president of RW Trend LLC; and Linda Wertheimer, senior national NPR correspondent and author of Listening to America.

Neilssen is the son of a Lutheran minister, and his mother used to work at the United States Bankruptcy Court, Southern District, in New York. He has lived in Princeton since 1985.

Neilssen got his early training at New York University at Stony Brook, where he chaired the student-run entertainment organization, which held 30 to 40 concerts per year. He likes to call the university Fillmore East (the famous club in Greenwich Village) because all the bands that played in New York would make a second stop at Stony Brook. After he graduated in 1979, with a degree in social sciences — and he emphasizes the “social,” a trait that comes in handy in his work — a friend started a lecture/entertainment company, BWI, that represented speakers for the college market and bands for the club market.

For 10 years Neilssen was a senior agent at another agency, described on its website as “the world’s longest-established premium speakers bureau.” He and his colleague, Les Tuerk, left to form BrightSight Group; Tuerk, a Florida Atlantic University graduate, is president.

“We look for interesting people and see if we can find a market for them,” he says. “We may know there is a market for them because of other speakers we have represented.” The new company has a couple of speakers in each topic area, such as innovation and creativity, leadership, motivation, and “a smattering of other ideas that capture the imagination of different customer bases.”

The partners decline to provide details on their commission, but their speakers get fees ranging from $5,000 to $100,000 to appear at such events as senior executive strategy session, corporation sales meetings, associations for annual programs, or university lecture series. Says Neilssen: “The customer base is broad and deep, and it’s international.” —Michele Alperin

Bright Sight Group, 268 Wall Street, Princeton 08540; 609-455-6659. Tom Neilssen, CEO. Home page: www.brightsightgroup.com

Architecture

Focus Architecture, 3 Tree Farm Road, Suite 200, Pennington 08534; 609-818-9400; fax, 609-818-9401. Thomas S. Townes, principal. www.focus-arch.com

Focus Architecture was created after Thomas Townes and his partner Dan Balto had been working together for eight years in an architecture firm that focused solely on the education market, Thomas Associates in Forrestal Village. They wanted to diversify. “We wanted to do something on our own and be more intimate in relationships with the clients we were working with,” says Townes.

The company is focusing on four market segments: education K-12, residential, commercial, and retail.

Townes says the firm wants to stay relatively small to maintain close relationships with clients, and he foresees a maximum of 10 to 20 employees. Townes expects that the firm will move to a new location after its two-year lease expires.

Townes graduated from Virginia Tech in 1976 and is licensed in New York, Pennsylvania, New Jersey, Virginia, and Delaware. He managed the office of Thomas Associates Architects and Engineers when it was acquired by a larger firm, Tetra Tech, in 2002. “That’s when I knew it was time to get out,” says Townes. “The only thing left for me to do in my career was to go out on my own.”

Crosstown Moves

Michael T. Remus CPA, 2663 Nottingham Way, Mercerville 08619; 609-540-1751.

The CPA firm of Michael T. Remus moved from 2642 Whitehorse-Hamilton Square Road to Nottingham Way.

Contracts Awarded

VaxInnate, 3 Cedar Brook Drive, Cedar Brook Corporate Center, Cranbury 08512; 609-860-2260; fax, 609-860-2290. David Jackson, vice president of process development and manufacturing. Home page: www.vaxinnate.com

In October VaxInnate Corporation secured $40 million in a Series C financing. Healthcare Ventures on Nassau Street is one of the investors, but the lead venture capitalists were two Menlo Park firms, New Leaf Venture Partners, which led the round, and Canaan Partners.

The firm is developing a vaccine for influenza and West Nile virus with proprietary technology created by Yale University-based Ruslan Medzhitov and Richard Flavell. It has 15,000 square feet of laboratory, production, and manufacturing space on Cedar Brook Drive, plus a laboratory in New Haven, Connecticut (U.S. 1, May 18, 2005).

In 2004 the company landed $23.1 million in Series B funding from CHL Medical Partners in Stamford, Connecticut, which led the financing, plus HealthCare Ventures, Oxford Bioscience Partners, and MedImmune Ventures.

ALK Technologies Inc., 1000 Herrontown Road North, Princeton 08540; 609-683-0220; fax, 609-683-0290. Alain Kornhauser, founder. Home page: www.alk.com

ALK Technologies launched a low-cost fleet management solution at the end of October. The web-based fleet management tool aims to improve fleet management and improve driver retention.

Called CoPilot Fleet Center, it delivers tracking, two-way messaging, and access to various location based services, including real-time traffic information and tips on important points of interest. It allows fleet managers to view their fleet in real-time.

Also last month ALK updated its fuel tax reporting software, PC*Miler/Fuel Tax 12, for motor carrier and private fleets. This year marks the 20th annual release of this product, said to be the routing and mileage standard for the transportation industry.

The firm, founded by Princeton professor Alain Kornhauser, offers packaged and custom software, mapping, GPS-linked navigation, and consulting for the transportation industry.

Death

Clifford Geertz, 80, on October 30. A cultural anthropologist, he was professor emeritus at the Institute for Advanced Study.

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