WILMINGTON,aaiPharma, embroiled in legal disputes and having already delayed a quarterly SEC filing, now has a new chief executive officer. But he’s a familiar face.

Dr. Frederick Sancilio, the founder of the company and executive chairman of the board, is taking over as CEO, aaiPharma announced before the markets opened this morning.

Sancilio launched the firm in 1979 and served as CEO until 2002.
He replaces Dr. Philip Tabbiner, the current CEO, who was promoted to replace Sancilio. The company said Tabbiner will remain with the company “for an extended period to facilitate the transition.” Tabbiner also gives up his board seat.

aaiPharma now faces class action lawsuits alleging it inflated its sales expectations. It issued a statement in February saying it was conducting an investigation of sales irregularities and might have to restate earnings for the last quarter of 2003 and the year, as well as current expectations.

One complaint alleges that aaiPharma failed to disclose recent “stellar financial results” were achieved through improper sales practices, such as “channel stuffing” or flooding wholesalers with products in order to artificially boost sales, and also failing to properly account for product returns in violation of generally accepted accounting principles.

aaiPharma’s stock has been hammered since January when it hit a high of $31.20. The company stock (Nasdaq: AAII) opened Monday down 3 cents at $8.47. It closed at $8.01, a drop of more than 5 percent.

As part of the management shakeup, the company also named a chief operating officer. He is Gregory Rayburn, who is senior managing director of FTI Consulting. aaiPharma said Rayburn is “nationally recognized expert in restructuring matters. FTI is a premier provider of corporate finance/restructuring, forensic accounting, economic consulting and trial services”

In a statement, the company said Rayburn “will report to Dr. Sancilio, and will focus on negotiating with existing creditors, evaluating banking proposals, and overseeing the development of operating and financial projections for the company.”

In an interview with Dow Jones News Service, Sancilio said any talk that aaiPharma was headed for bankruptcy was “ridiculous. Our cash flow is very positive and we have a very healthy and thriving business.”

Sancilio also said that Tabbiner left voluntarily.

aaiPharma: www.aaiPharma.com