Valeant Pharmaceuticals International (NYSE:VRX) (TSE:VRX) announced the appointment of Joseph Papa as Chairman and CEO. He will assume his position in early May.
Mr. Papa resigned as Chairman and CEO of Perrigo Company (NYSE:PRGO) to join Valeant. He will replace Michael Pearson, who decided to step down from his position after coming from a medical leave and amid the controversies confronting the company.
Ideal leader for Valeant
In a statement, Valeant Chairman Robert Ingram, said, “The Board has conducted a thorough search process and believes that Joe is the ideal leader for Valeant at this time. He has a strong shareholder orientation, a background in science, and an unmatched track record of accomplishments, highlighted by his ability to lead companies through times of transition and drive excellence across commercial, manufacturing and R&D platforms.”
Mr. Papa has more than 35 years of experience in healthcare services, pharmaceutical and specialty pharmaceutical industries. He served as CEO of Perrigo since 2006 and became its Chairman in 2007. He led the consistent growth of the company and built it into a global leaded with net sales of over $5 billion.
“I am excited to take on the challenge of leading Valeant and helping the company chart a new course. Valeant has world-class franchises, important treatments for patients across numerous therapeutic areas and a very talented and dynamic workforce, and I am confident that the company has a bright future ahead,” said Mr. Papa.
He added that the company has an” opportunity to move forward with a renewed focus on operating with integrity” and “providing customers with safe and affordable products that improve their lives.”
Valeant received notices of default
Last week, Valeant disclosed that it received additional notices of default from the trustee under the indentures governing its 5.375% Senior Notes due 2023; 6.375% Senior Notes due 2023; 7.50% Senior Notes due 2023; and 7.25% Senior Notes due 2023.
According to the company, the delayed filing of its Form 10-K for the fiscal year 2015 was the main reason for the notice of default. Under the bond indentures, Valeant has until June 21, 2016 to file its form 10-K to resolve the default.
Earlier this month, the company said it was working “working diligently and it is on schedule to file its Form 10-K on or before April 29, 2016.” The company also explained that the notice of default will not accelerate any of its indebtedness.
It was also reported that it sought the help of investment banks to review its options after buyout firms and other companies expressed interest on some of its businesses.
Bill Ackman, CEO of Pershing Square Capital Management and a Board member of Valeant, expressed optimism that he would recoup losses from investment in the Canadian pharmaceutical company. He was confident that a new leadership could restore Valeant’s value.