Valeant Names Joseph Papa as New CEO--Update
April 25 2016 - 10:21AM
Dow Jones News
By Anne Steele, Jacquie McNish and David Benoit
Valeant Pharmaceuticals International Inc. named Joseph Papa as
its next chairman and chief executive, wrangling the pharmaceutical
veteran away from Perrigo Co., the company he led for a decade.
Mr. Papa is expected to join Valeant by early May, the company
said Monday. Valeant had been working to hire him for several
weeks.
Valeant Chairman Robert Ingram said the board had conducted "a
thorough search process" for its next leader as it sought to
replace Michael Pearson, Valeant's CEO since 2008.
Mr. Pearson has come under criticism from the company's board of
directors for the aggressive tone he set at the company to grow its
business and stock price. Mr. Pearson has been subpoenaed to
testify at a Senate hearing April 27 about drug pricing and
distribution practices at Valeant.
"We have an opportunity to move forward with a renewed focus on
operating with integrity across all areas of the business and
providing customers with safe and affordable products that improve
their lives," Mr. Papa said in a statement. Mr. Ingram noted that
"fostering an ethical culture and creating opportunities for
professional development have always been high priorities for
Joe."
Mr. Papa's move was complicated by an unusually restrictive
noncompete clause that barred him from working for competitors
operating directly or indirectly in Perrigo's various health care
markets.
According to people familiar with the discussions, Perrigo and
Valeant were in final negotiations last night of the terms under
which Mr. Papa would be released from his noncompete agreement.
A Perrigo spokesperson declined to comment on individual
contractual discussions. The company announced his departure as CEO
earlier Monday, saying he would be replaced by John
Hendrickson.
Mr. Papa, 60 years old, has more than 35 years of experience in
the pharmaceutical, health care services and specialty
pharmaceutical industries. He had been CEO of Perrigo since 2006
and chairman since in 2007. During his tenure, the company's sales
grew to more than $5 billion.
Previously, Mr. Papa was chief executive and chairman of the
pharmaceutical and technologies services segment of Cardinal Health
Inc. From 2001 to 2004, he was chief operating officer of Watson
Pharmaceuticals Inc.
Mr. Pearson is expected to remain with the company until Mr.
Papa arrives.
Mr. Pearson, 56 years old and recently recovered from severe
pneumonia, had lost the support of the company's board, which last
month announced a search for his replacement.
Meanwhile, shares of Perrigo tumbled 10% in early trading Monday
as the company slashed its guidance for the year while announcing
Mr. Papa's departure. His departure comes after he beat back a $26
billion hostile takeover bid from Mylan NV last year, spearheading
a campaign that ultimately persuaded shareholders to reject Mylan's
bid. At their current level, the company's shares have a value of
roughly $15.5 billion.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
April 25, 2016 10:06 ET (14:06 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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