Tar Heel Tattler - July 2006

Drug maker's IPO isn't heaven-sent
By Chris Richter

Raleigh-based Voyager Pharmaceutical Corp. is trying to develop Memryte, its treatment for Alzheimer’s disease. If its former chief scientific officer and co-founder had his way, it also would be working to glorify God.

That’s what Voyager claims. It’s suing Richard Bowen, who was fired in December, and Craig Atwood, research director at the Wisconsin Alzheimer’s Institute and a former Voyager consultant. It contends that Bowen, aided by Atwood, undermined an initial public offering and threatened to publish confidential research. Preliminary bids on Dec. 7 indicated that the IPO would raise $65 million, $35 million below the goal. Voyager canceled the IPO Dec. 13, the day it let Bowen go.

Bowen founded Voyager with CEO Patrick Smith and Chief Financial Officer David Corcoran in February 2001. The suit alleges that Bowen began behaving strangely after he took time off in May 2005 to evaluate his role in the company. At the annual meeting in September, the suit says, Bowen demanded that “the glorification of God” be part of Voyager’s mission statement. Those who didn’t agree, he said, should leave the company.

After Bowen returned from a medical leave, Voyager says, he withheld from management research that would have helped the IPO. On Dec. 8, the suit says, Bowen warned some shareholders that God had told him the IPO would fail. The next day, he and Atwood met secretly with representatives of San Francisco-based WR Hambrecht + Co., the investment bank underwriting the IPO. Voyager alleges that Bowen told Hambrecht there were problems with the Phase I trial results that management kept him from investigating. The suit claims that Bowen was trying to create a shareholder revolt that would help him win control of Voyager.

In an affidavit, Bowen admits questioning Voyager’s handling of research and operations. But he says he wanted to publish information about the research because it’s common practice and failing to show progress would have hurt the company. As for the other allegations: Smith and Corcoran are trying to discredit him, he says.

God is not in its mission statement, but manna — though not the heavenly kind — could be coming. Voyager has finished Phase II trials for Memryte. In January, Smith sent investors a letter announcing a plan to offer them 1.5 million shares. It also said Voyager will attempt an IPO again this year.