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.
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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 [email protected]