Optimer Pharmaceuticals Inc OPTR.O fired its chairman, finance chief and vice president citing lapses in corporate governance practices related to the company's relationship with its Taiwanese affiliate, sending its shares down 7 percent.
The maker of diarrhea drug Dificid, removed its co-founder Michael Chang for his actions as Optimer's representative on the board of Optimer Biotechnology Inc (OBI), its 43 percent-owned independent affiliate based in Taiwan.
Optimer said the grant of 1.5 million OBI shares to Chang, potentially for the benefit of a third party, represented a conflict of interest and pointed to Chang's "failure to identify and effectively manage compliance (and) record keeping."
Optimer was not immediately available for comment.
The company's chief financial officer John Prunty and vice president Youe-Kong Shue were fired as they failed to follow proper procedures when they learnt of the OBI shares issue, Optimer said in a statement.
The company said it has disclosed the matter to the relevant U.S. authorities and is cooperating with them in their review.
Hank McKinnell, former Pfizer Inc (PFE.N) chief executive, who was appointed Optimer's lead independent director in February, replaces Chang as chairman.
Chang remains a director of the company, but the board has asked for his resignation, Optimer said.
Optimer named Kurt Hartman, currently general counsel, chief compliance officer and senior vice president, as acting CFO and said it has begun looking for a permanent finance chief.
The company, which is to report first-quarter results on May 3, said it expects gross quarterly revenue of $16.5 million.
The company's shares, which have gained a fifth of their value in the last three months, were trading down 7 percent at $13.26 on Monday on the Nasdaq.
(Reporting by Balaji Sridharan in Bangalore; Editing by Viraj Nair, Roshni Menon)