Valeant Hiring Paul Herendeen as New CFO
August 21 2016 - 10:10PM
Dow Jones News
Valeant Pharmaceuticals International Inc. is expected to
announce it has hired Paul Herendeen as its new chief financial
officer, luring the executive away from animal-health giant Zoetis
Inc., according to sources close to the companies.
Mr. Herendeen, 60, would replace Robert Rosiello, who will
remain with the Canadian pharmaceutical company as head of
corporate development and strategy, according to the sources.
The hire, expected to be announced Monday morning, is a
continuation of the shake-up at the embattled drugmaker. Valeant
named a new general counsel earlier this month, expanded its
executive committee and gave some of its senior executives bigger
roles.
The company has been beset by months of turmoil. In April, it
named Joseph Papa, a veteran drug industry executive, as its
chairman and CEO, replacing longtime chief Michael Pearson.
Mr. Herendeen is expected to officially join the company Monday,
following a summertime interview process that included lengthy
conversations with Valeant's Mr. Papa and Mr. Rosiello, said a
source.
Mr. Herendeen will leave Zoetis, a company he came out of
retirement to join two years ago. He shepherded the company through
costs cuts, acquisitions and a brush with activist investor William
Ackman, who bought into Zoetis in 2014.
Mr. Ackman is also an investor in Valeant and a board member,
but sources said he didn't speak directly with Mr. Herendeen about
the move.
A spokesman for Zoetis declined to comment.
Mr. Herendeen is a veteran of the drug industry, and was also
CFO of drugmaker Warner Chilcott PLC, which he helped sell to
Actavis Inc. in 2013.
Shares of Zoetis are up almost 50% since he joined. Valeant's
stock price, which traded above $260 a share last year, closed at
$28.74 on Friday.
The company's board brought in Mr. Papa—former CEO of Perrigo
Co.--as Valeant shares plunged in value. The company's strategy of
acquiring drugs and raising their prices drew heavy scrutiny along
with its accounting practices. Earlier this year, the company also
had a close brush with defaulting on the terms of its debt due to a
late annual-report filing.
But Mr. Papa has had some success in stabilizing the
company.
He was able to convince lenders last week to amend terms on some
of its debt and give the company some breathing room in its efforts
at a turnaround. The company also earlier reaffirmed its earnings
guidance for the year, while analysts upgraded their view of the
stock. Mutual fund giant Fidelity has also sharply boosted its
stake this year.
But the company is still struggling with the fallout from its
accounting troubles. T. Rowe Price Group Inc. filed a lawsuit
against the company last week, alleging that Valeant engaged in "a
fraudulent scheme" that cost shareholders billions of dollars.
The Wall Street Journal reported earlier this month that Federal
prosecutors are investigating whether Valeant defrauded insurers by
obscuring its ties to a mail-order pharmacy that boosted sales of
its drugs.
Write to Vipal Monga at vipal.monga@wsj.com
(END) Dow Jones Newswires
August 21, 2016 21:55 ET (01:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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