Valeant ($VRX) has been working to reassure investors after channel-stuffing allegations and political backlash over its drug-pricing practices put a serious dent in its share prices. And it's hoping that three new board members will do the trick.
Wednesday, the company said it had added longtime pharma vet Fred Eshelman, Pershing Square exec Stephen Fraidin and former University of North Carolina president Thomas Ross to its slate of directors. Simultaneously, Anders Lonner stepped down to focus on other priorities, putting the size of Valeant's board at 14.
The company hopes it can harness its newcomers' experience to navigate the tumult of the last few months, which brought a delayed earnings report and restatement, and a new SEC probe into its connection to now-dead specialty pharmacy Philidor.
Eshelman held down several exec posts within the industry, including CEO and executive chairman of PPD and founding chairman at Furiex, now part of Allergan ($AGN). Fraidin, formerly of Kirkland & Ellis, is considered a top M&A lawyer and currently serves as vice chairman at Pershing Square, the hedge fund of Valeant enthusiast Bill Ackman. And Ross, who held the president's spot at UNC for 5 years, steered the university system through a cheating scandal; in selecting him, Valeant's board was looking for someone with a track record in crisis management, sources recently told The Wall Street Journal.
"Fred's extensive experience in the pharmaceutical industry, Steve's business, legal and corporate governance acumen, and Tom's broad public policy expertise are valuable additions to the Board as we strengthen the Company's corporate governance practices and move the company forward," Valeant Chairman Robert Ingram said in a statement.
The move marks Valeant's first efforts to build "out our senior team to provide additional resources and support" for CEO Michael Pearson, who returned to the helm in late February after a two-month medical leave of absence. At that time, Valeant also announced that Pearson would turn over the chairman's role to Ingram, who held the position while Pearson was out.
The new directors will have their work cut out for them. Pearson, once all about growth through price hikes and M&A, has vowed to do away with both those tactics in the near term. Valeant will focus on beefing up relationships with payers, regulators and government officials while improving its reporting procedures, internal controls and transparency, he says.
- read Valeant's release
- see the WSJ's take (sub. req.)
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