Nursing-home pharmacy Omnicare Inc. (OCR) tapped drug-distribution industry veteran John Figueroa to be its chief executive, effective Jan. 1, boosting the company's shares Wednesday.
Figueroa, who has been serving as president of drug wholesaler McKesson Corp.'s (MCK) pharmaceutical group, replaces James Shelton, who became Omnicare's interim president and CEO in August following the sudden departure of longtime CEO Joel Gemunder.
Figueroa, who also will become a member of Omnicare's board, will lead a company that has seen a difficult 2010, including a sharp second-quarter profit drop tied to lower prescription volume, weakened share price, a downgrade from Moody's Investors Service, a management shakeup and the unsealing of a lawsuit alleging Omnicare submitted false claims to government health programs. Omnicare has denied those fraud allegations.
McKesson, the largest U.S. drug distributor by revenue and market cap, on Wednesday named Brian Tyler, current head of its medical-surgical business, to replace Figueroa as president of that company's pharmaceutical group, effective Jan. 1.
Omnicare shares recently traded up 4% at $23.94, while McKesson slipped 1% to $66.15.
"John Figueroa is an excellent hire for Omnicare," said JP Morgan analyst Lisa Gill, noting that McKesson has expanded its drug-distribution margins to be the highest in that industry under his leadership in the past five years.
Omnicare is a long-time McKesson client, so Figueroa should be well aware of the company's potential, she said. His strong background with a solid company "should give investors confidence that OCR's business model can attract strong management," said Gill.
As for McKesson, Barclays Capital analyst Lawrence Marsh noted Tyler's many years of experience. His appointment "validates the quality and experience of senior managers at McKesson under Chairman and CEO John Hammergren," Marsh said.
Tyler brings deep experience in a variety of roles at McKesson, so the transition should be smooth, with continued strong performance in the business, Robert W. Baird analyst Eric Coldwell said.
-By Dinah Wisenberg Brin, Dow Jones Newswires, 215-656-8285; email@example.com