- After less than four years in the position
- Praise, thanks and good wishes for Flores
- Greg Russotti taking over temporarily
- Search for a successor
(exechange) — Philadelphia, Pennsylvania, April 17, 2023 — Lalo Flores, chief executive of Century Therapeutics, leaves his position. As announced by Century Therapeutics Inc. in a news release published on Wednesday, April 12, 2023, and in a regulatory filing published on Monday, April 17, 2023, Osvaldo (Lalo) Flores has left his post as chief executive officer at the biotechnology company focusing on “off-the-shelf” cell therapies for cancer, after less than four years in the role, effective April 11, 2023.
The average tenure of CEOs who announced their departure over the past 12 months was 7.8 years. This is according to data collected by CEO-exit research firm exechange.
exechange tracks CEO departures at the 3,000 largest publicly traded companies in the U.S., examines the reasons CEOs leave and determines the Push‑out Score™, a measure of pressure on departing chief executives on a scale of 0 to 10.
Century Therapeutics will undertake a search for a successor.
Lalo Flores’s duties as CEO will be taken over temporarily by Gregory (Greg) Russotti, most recently Chief Technology Officer at Century Therapeutics Inc., as Interim Chief Executive Officer.
Lalo Flores’s move coincides with a management shake-up also involving the positions of Chief Financial Officer; and President of Research and Development.
“To pursue other opportunities”
The management change is explained as follows. Century Therapeutics stated: “Dr. Russotti, who has served as the Company’s Chief Technology Officer since January 2020, is succeeding Lalo Flores, Ph.D., who has stepped down as Chief Executive Officer and as a member of the Company’s Board of Directors to pursue other opportunities.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (27.4% of cases), implementation of a planned succession (16.7%) and the statement that the time was right for a change (9.8%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (6.3% of cases), personal reasons (3.8%) and conduct issues (2.2%). Rather rarely stated reasons are health problems (1.6% of cases), disagreement (1.3%), death (1.3%), the desire for more time with family (0.9%) and career change (0.6%). Sometimes, more than one reason was given. In 28.1% of cases, no reason was given.
Precise information regarding Lalo Flores’s future plans was not immediately available.
“Stepped down”
Century Therapeutics said: “Pursuant to notice provided on April 11, 2023, Osvaldo Flores, Ph.D. stepped down as the President and Chief Executive Officer of Century Therapeutics, Inc. (the “Company”) and as a member of the Board of Directors of the Company (the “Board”) effective April 11, 2023.”
“No disagreement”
Century Therapeutics stated, regarding the change: “There was no disagreement between Dr. Flores and the Company on any matter related to the Company’s operations, policies or practices that led to Dr. Flores’ resignation from the Board.”
Share price decline since April 2022
The announcement follows a decline in Century Therapeutics Inc.’s share price of 74% since April 2022.
In the position of CEO since 2019
Lalo Flores became CEO of the Company in 2019.
Flores has served as a member of the Company’s Board since the 2021 Reorganization, and previously served as a member of the board of managers of the LLC Entity from June 2019 until the 2021 Reorganization.
Flores previously served as a member of the board of directors of Prior Century from September 2018 until the 2021 Reorganization.
Flores has served as the Company’s President and Chief Executive Officer since June 2019 and the President and Chief Executive Officer of Prior Century from September 10, 2018 until the 2021 Reorganization.
Flores was previously Vice President of R&D from December 2015 until December 2017, and Entrepreneur-in-Residence from January 2018 until August 2018 with Janssen, a Johnson & Johnson company.
He founded and served as President and Chief Scientific Officer of Novira Therapeutics from January 2009 to December 2015. Prior to Novira, Flores was a department head at Merck & Co., where he led drug discovery and development programs across diverse therapeutic areas including antiviral, oncology, and metabolic, from 1999 to 2008.
Flores began his R&D career at Tularik Inc., establishing key elements of the antiviral drug discovery platform.
Flores received his Ph.D. in Biochemistry and Molecular Biology from Rutgers University and was a postdoctoral Fellow at the Salk Institute.
No statement by Lalo Flores
In the news release announcing his departure as CEO of Century Therapeutics Inc., Lalo Flores received praise, thanks and good wishes.
The announcement of his departure as CEO does not include a statement by Lalo Flores.
Over the past 12 months, 25% of all outgoing CEOs remained silent in the departure announcement, according to data compiled by exechange. Departing CEOs who did make a statement said an average of 109 words. The longest statement was 510 words. The shortest statement was 23 words. Leadership transitions in which departing CEOs provide conspicuously short or no explanations for their move are statistically associated with elevated pressure and show an increased incidence of Push-out Scores above the critical threshold of 5, according to exechange data.
40% of CEOs are forced out or fired
When CEO departures are announced, exechange determines the Push-out Score on a scale of 0 to 10 to assess how likely it is that the chief executive was pushed out or felt pressure to leave the position, with 0 being most likely a voluntary move and 10 being most likely a forced exit. Anything over a 5 indicates that there are valid reasons to believe an executive may have been pushed out.
Of the 317 CEO departures in the Russell 3000 Index evaluated over the past 12 months (April 17, 2022, to April 16, 2023), the average Push-out Score was 6.2, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When performance issues, time with family or pursuit of other opportunities were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 40% of the CEO departure events from the past 12 months received Push-out Scores of 8 or higher.
In other words, in the past 12 months, two in five departing CEOs were forced out or fired.
Push-out Score for Lalo Flores’s move determined
The Push-out Score regarding Lalo Flores’s move is explained point by point in the exechange report.
exechange reached out to Century Therapeutics and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 17.2023 ($).