The chief executive of ProdiGene Inc., the Texas company fined late last year for mishandling genetically altered corn, will be replaced amid a reorganization meant to strengthen the company's focus on keeping pharmaceuticals out of the food supply, according to a board member overseeing the changes.

The chief executive, Anthony G. Laos, said his employment contract expired yesterday and the company's board decided, with his consent, not to renew it. Laos came under fire last year when the Agriculture Department cracked down on ProdiGene for errors in handling corn that had been genetically altered to grow a pig vaccine. Potentially tainted food corn in Iowa was burned, as was a warehouse full of soybeans in Nebraska that may have been tainted with small amounts of the pharmaceutical corn.

"My tenure is over" at ProdiGene, Laos said yesterday from the offices of another company he controls in Nebraska, where he lives. "It was time to come back home."

Thomas L. Steen, an investment manager in Iowa who helps run a fund with a significant stake in ProdiGene, sits on the ProdiGene board of directors. He said the board was seeking a chief executive with extensive experience in complying with government regulations on pharmaceutical production, experience that Laos did not have.

Under new leadership, the company will tighten its operations so that last year's errors are not be repeated, Steen said. "We want to do the right things," he said yesterday from Des Moines.

ProdiGene has been in the vanguard of efforts by the biotechnology industry to use corn, safflower and other food plants as factories for producing pharmaceutical or industrial proteins. Using genetic engineering, the companies insert into a plant a new gene containing instructions for growing a valuable protein. They grow the plant in fields, then harvest the grain and refine the protein, bottling or packaging it like any other drug or chemical.

This idea has been greeted enthusiastically in rural America, where farmers are urgently looking for more valuable crops. But environmental groups, joined recently by the food industry, have been warning that if the biotech companies are not exceedingly careful in their production practices, the technology could taint the food supply with proteins never meant to be eaten.

ProdiGene, of College Station, Tex., became a case study in the hazards last fall, when lax controls allowed pollen from pharmaceutical corn to spread to nearby fields of food corn in Iowa. In Nebraska, small amounts of corn leaf may have tainted tons of soybeans. The corn and soybeans were kept out of the food supply only by the last-minute intervention of the Agriculture Department. ProdiGene paid a $250,000 fine and was ordered to spend up to $3 million to reimburse the government so it could destroy the soybeans.

Laos, an affable one-time follower of the Grateful Dead, was a tireless booster of the technology. But as it became clear late last year that ProdiGene and similar companies needed to adopt far tighter procedures, his inexperience in regulatory compliance came to be seen throughout the biotech industry as a liability.

Steen, the board member, said the privately held company's board was being restructured, and it may seek new investment capital. The company has funds to survive the present drought in technology financing, he said, but lacks capital to expand.

Steen acknowledged that some money invested in ProdiGene -- he would not say how much -- came from a state-sponsored agricultural fund in Iowa that he helps run. It is, in other words, Iowa taxpayers' money.

This fact, known to some people in Iowa but not to those in Washington who have been following the issue, raises the question of whether ProdiGene will be free to pull its production out of Iowa if that turns out to be the safest way to grow pharmaceutical corn. Other companies have resolved not to grow such corn in the midwestern farm belt this season as they wait for the government to develop more elaborate procedures for safeguarding the food supply. Some plan to grow in Arizona, Hawaii or other states where little food corn is produced.

Steen said there would be no undue pressure on ProdiGene to keep producing in Iowa, and said the new chief executive would have a free hand to design the safest possible production system.

"It's a very legitimate question," Steen said. "He would absolutely have that freedom."