Mark Ahn, CEO of embattled Lake Oswego biotech firm, Galena Biopharma, resigns

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Mark Ahn has resigned as president and CEO of Galena Biopharma, a Lake Oswego biotech firm.

(Randy L. Rasmussen / The Oregonian)

Mark Ahn has resigned as president and CEO of Galena Biopharma, a Lake Oswego biotech firm under federal investigation, making way for new CEO Mark Schwartz.

Galena is a closely watched local firm known for promoting a possible breast cancer vaccine that has not completed clinical trials designed to test efficacy. But the last couple of years have been tumultuous for the firm, now under investigation by the Securities and Exchange Commission for allegedly paying for an improper stock promotion scheme.

The firm hired an investor-relations firm to post essays that were presented online as objective analyses without disclosing that they were paid for by the firm, as appears to be required by federal law. Following the campaign, executives and directors of the firms made millions by selling shares at a profit.

Ahn in the past has denied knowing the promotional materials did not disclose that they were paid for by Galena. He said the subsequent selloff by insiders didn't reflect a loss of confidence in the company by its directors. The firm's stock price has dropped precipitously from more than $7 a share since the promotional campaign was disclosed by columnist Adam Feuerstein of The Street. At about 9 a.m. Thursday, the stock sold for $2.20.

Feuerstein has written that Ahn was reportedly fired. Asked Wednesday night whether he was leaving the company by choice, Ahn said he could not comment until Thursday. A Galena press release Thursday said he resigned "to pursue other long held personal and professional goals."

Ahn, who'd worked at other biotech firms and taught business at Willamette University, took over the top job at Galena in April 2011.

His successor, Schwartz, was formerly the company's chief operating officer.

The firm faces five lawsuits in Oregon as well as five newer ones in Delaware. They claim the Galena promotional campaign hurt investors, among other things.

According to the company's most recent quarterly filing with the SEC, an internal investigation was conducted of the allegations, and on July 21 the firm hired a expert securities lawyer to act on the findings of the investigation.

--Nick Budnick

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