Facing rising pressure to its generics business and plummeting sales, Amneal’s investors have been looking for a shakeup at the top. Ultimately, shareholders looked to the past to lead the drugmaker into the future.
Paul Bisaro, Amneal’s executive chairman, and Rob Stewart, the president and CEO he recruited, will step down from their posts as the drugmaker looks to rework its executive team.
Co-founders Chirag Patel and Chintu Patel will pivot from their roles as co-chairman to take over as co-CEOs, while Paul Meister, a co-founder of Liberty Lane Partners and former president of MacAndrews & Forbes Incorporated, will assume the role of executive chairman. Three independent directors, Robert L. Burr, Janet S. Vergis and Dharmendra Rama have also resigned.
Meister, who was appointed to the board by Amneal's former ownership group, will stay on until a replacement is elected at the company's 2020 meeting, according to an SEC filing.
The drugmaker’s stock was trading down 7% to $3.08 after the news Monday and is down a whopping 86.7% from a high of $24.25 per share in August 2018.
The replacement of Bisaro marks a remarkable fall from grace for the executive who engineered Amneal’s $6.4 billion buyout of Impax Labs in 2017, making it the fifth-largest generics player at the time.
Bisaro, who helmed Impax and later Amneal after stepping down as CEO and chairman at Allergan in December 2017, was known for a long M&A winning streak after building Actavis into a top-tier generics maker through aggressive buyouts. One of those blockbusters was Actavis’ $70.5 billion purchase of Allergan—which took the name of the newly merged company—in March 2015.
Bisaro vacated his chairman post at Allergan in October 2016 and later resigned his board position in late 2018.
During his time as chairman at Amneal, Bisaro was instrumental in arranging the poaching of Allergan COO Stewart in December 2017 after the Impax merger. Stewart served alongside Bisaro during his Actavis tenure.
The leadership upset follows another rough quarter for Amneal; the drugmaker posted a 12.5% drop in combined net revenue in the second quarter over the previous year, down to $404.6 million. The company’s generics and specialty drug businesses both declined.
“Recent industry headwinds and increased competition continue to put pressure on the company,” independent director Ted Nark said in a statement. “To succeed in today’s environment, Amneal must move decisively and prioritize its key strategic initiatives that will drive value for our shareholders. Chirag and Chintu possess both the leadership skills and the requisite strategic, operational, manufacturing and R&D expertise to execute on these efforts.”
On the heels of Monday’s news, analysts said even more trouble could be brewing for Amneal, which is facing industrywide pricing pressure that is pinching larger competitors like Mylan and Teva.
Cantor analyst Louise Chen said Amneal’s stock could continue to dwindle, especially as Wall Street gets familiar with the Patels as co-executives and see what they will do with their stock holdings after the shakeup.