Although there are many examples throughout history of positive changes in top company management teams, important personnel moves tend to unsettle investors. They get worried that significant changes could reflect instability, indecision, or both in a company’s decision-making.
That seemed to be very much the case Monday with biotech Scholar Rock (SRRK -3.35%). Its stock closed almost 4% lower in price on a day when the S&P 500 index basically traded flat.
A quartet of new executive appointments
Scholar Rock’s C-suite now looks radically different, as the company brought in a clutch of new top managers.
The incoming CEO is David Hallal, the chairman of the company’s board. As CEO, he succeeds Jay Backstrom, who is transitioning into a role as strategic advisor. Hallal served in several managerial positions with Scholar Rock’s peer, Alexion, including CEO, before joining Scholar Rock’s board in 2017.
There will be three other high-level executives reporting to him. R. Keith Woods is now the company’s chief operating officer, Vikas Sinha — also an Alexion veteran — is chief financial officer, and Akshay Vaishnaw is president of research and development (a crucial position in clinical-stage biotechs like Scholar Rock).
Nothing to see here?
It’s doubtful that investors are concerned about the qualifications and/or expertise of the new Scholar Rock management, given their distinguished histories. The concern is that a very significant set of changes was made all at once; I’d hardly fault them for feeling that way.
As far as we know, Scholar Rock isn’t particularly in trouble in any way, but investors should certainly keep an eye on the company’s press releases and regulatory disclosures in the coming days and weeks.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
