Valeant names Papa CEO after he resigns from Perrigo
(Reuters) - Former Perrigo Co Plc (PRGO.N: Quote) head Joseph Papa was named Chief Executive Officer at Valeant Pharmaceuticals International (VRX.TO: Quote) on Monday, a role in which investors said he should focus on returning the company to growth.
Papa will replace CEO Michael Pearson, whose years of frenzied dealmaking fueled double-digit profit increases at Valeant until scrutiny of its controversial relationship with a specialty pharmacy and history of sharp drug price increases hit its shares and sales last fall.
Shares of Laval, Quebec-based Valeant rose on Monday after it announced the high-profile hire before losing about 2.2 percent in New York trading to close at $35.16.
Shares are far from their August 2015 high of $263.70, falling to the current level earlier this year after Valeant said it would restate earnings and delay filing its 2015 financial report, opening the door to possible default on its $30 billion in debt.
Papa, 60, takes the reigns after a decade at Perrigo and previous positions at drug distributor Cardinal Health (CAH.N: Quote), generic drugmaker Watson Pharmaceuticals which is now Allergan Inc (AGN.N: Quote), and pharmaceutical giant Novartis AG (NOVN.S: Quote).
Last year, he led Dublin, Ireland-based Perrigo to rebuff a $26 billion takeover by Mylan NV (MYL.O: Quote) and spent six months meeting with investors, urging them not to sell to Mylan. His meetings and a public letter campaign convinced shareholders that Perrigo should be a standalone company.
Papa's track record helped his case, but recent months have been challenging and Perrigo said on Monday that its earnings and sales will fall short this year, disappointing shareholders.
The shortfall is in part due to weak sales in Europe and its Omega Pharma acquisition, both part of Papa's strategy, said Wells Fargo analyst David Maris, who downgraded the stock to market perform.
Papa does not have significant experience in branded prescription drugs, Valeant's area of focus, Maris said. Perrigo sells over-the-counter products, which are a small part of Valeant's business. Continued...