Valeant Names Zoetis Executive as Financial Chief--Update
August 22 2016 - 10:44AM
Dow Jones News
By Vipal Monga
Valeant Pharmaceuticals International Inc. confirmed Monday that
it has hired Zoetis Inc. executive Paul Herendeen as its new chief
financial officer, the latest shake-up at the embattled
drugmaker.
The Wall Street Journal reported the news Sunday night.
Mr. Herendeen, 60, has replaced Robert Rosiello in role
effective immediately. Mr. Rosiello will remain with the Canadian
pharmaceutical company as head of corporate development and
strategy.
The hire 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.
"There are a lot of challenges to overcome," Mr. Herendeen said
in an interview with The Wall Street Journal. He plans to focus on
reducing Valeant's debt burden of $30 billion and tightening the
company's accounting policies.
Valeant's Chief Executive Officer, Joseph Papa, said in an
emailed statement that he hired Mr. Herendeen because of his
"strong operational focus and disciplined approach to financial
management."
The company has been beset by months of turmoil. In April, it
named Mr. Papa, a veteran drug industry executive, as its chairman
and CEO, replacing longtime chief Michael Pearson.
The addition of Mr. Herendeen follows 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. Herendeen, a hockey enthusiast, added that he didn't leave
Zoetis because of any issues with the animal-health company, but
because successfully turning around Valeant could be a capstone to
his career.
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.
Separately, Zoetis said it would name Glenn David as CFO.
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, but rose 6.5% to $30.62 in Monday morning
trading.
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
because of 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.
--Joshua Jamerson contributed to this article.
Write to Vipal Monga at vipal.monga@wsj.com
(END) Dow Jones Newswires
August 22, 2016 10:29 ET (14:29 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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