Investors greeted the news of the appointment of David Hung as the chief executive officer of Axovant Sciences Ltd (NYSE:AXON) warmly by pushing up the price of the stock by more than 20%. Prior to the appointment, Hung was the chief executive officer of the company that he co-founded – Medivation. One of products that Medivation is well known for is Xtandi a blockbuster drug for treating prostate cancer which was sold to Pfizer.
Axovant’s most promising product is interpirdine, an experimental pill for Alzheimer’s. Results of the late-stage trial for this drug are expected towards the last quarter of the year. News that Hung would be joining Axovant fueled expectations among investors that the odds of the results of the trial being positive are high. Interpirdine was acquired from another pharmaceutical firm by Axovant’s founder for approximately $5 million.
SEC filing
In a filing with the U.S. Securities and Exchange Commission which was made at the close of business on Monday, confidence is likely to increase as Hung has made a commitment to put in $10 in the next financing round that Axovant conducts.
Hung’s compensation at Axovant is also generous. This include Axovant options numbering six million in total. The exercise price of two million of these options will be determined by the stock price as of December 29. This means that their price will be heavily dependent on the results from the late stage trial of the Alzheimer’s drug. Additionally, most of the options will only vest in the event that the stock appreciates by at least 1.5 times beginning on December 29.
Exercise price
Also, the exercise price of another two million options is $15.13 but will only vest in the event that the stock of Axovant reaches $100 or if the results of the interpirdine study is positive. If the trial ends up being unsuccessful, the exercise price of these options will be $15. The exercise price of the final two million options is $15.13.
On Monday shares of Axovant Sciences shot up by 22.54% to close the day at $18.54.