|J. Michael Pearson|
On Sunday, Valeant ($VRX) rewelcomed CEO J. Michael Pearson after two months of pneumonia-induced medical leave--a move industry watchers weren't sure the company would make after the rocky few months that preceded his absence. He'll take the chief-executive reins from director Howard Schiller, who served as the company's skipper in the interim, but he won't resume his post as chairman. Robert Ingram, the company's interim chairman, will take on that job.
The announcement follows reports from last week that Valeant's board was up in the air over whether Pearson was ready to come back. Earlier in the week, the company had announced it would restate earnings on findings from an internal investigation launched amid scandal last year. And Valeant has been feeling the heat from Congress and presidential candidates for months over Pearson's price-hike strategy.
Now, Pearson says he's ready to get back to work putting Valeant's past in the past. He plans to beef up relationships with payers, regulators and government officials, "while improving Valeant's reporting procedures, internal controls and transparency."
"I realize that recent events are disappointing to everyone and it is my responsibility to set the appropriate tone for the organization," he said in a statement.
Despite Pearson's recent missteps, Valeant said Sunday it was "delighted" by Pearson's return, "as his vision and execution have been central to Valeant's success over the past 8 years." And the company isn't alone in feeling that way. Last week, Nomura analyst Shibani Malhotra warned in a note to clients that the "loss of Pearson as a leader may remove much of the company's competitive advantage."
But Pearson won't stay in the CEO's chair forever, and Valeant knows that. His hospitalization provided a wake-up call for the board, Ingram said in a statement, and going forward, succession planning--as well as "building out our senior team to provide additional resources and support" for Pearson--are high priorities for the Canadian drugmaker's board.
At least, they will be once Valeant has a second to give them its full attention. The company still has an ad hoc committee investigating its Philidor-related accounting, which forced it to put off filing its 10-K for last year. It's also delaying its fourth-quarter results from last year and its 2016 guidance on account of Pearson's comeback, it said.
"Our hope is that the ad hoc committee will be able to conclude its efforts soon with regards to financial reporting and internal control matters, so we can all focus on building the best company we can," Ingram said.
- read Valeant's release
- read Valeant's release
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