It’s been a tough 13-plus months for Perrigo since John Hendrickson stepped in for departing CEO Joseph Papa. And now, the company is getting another change at the top.
Monday, the Dublin drugmaker announced that Hendrickson would retire and that it had set up a search committee to tap his replacement. Until it can, Hendrickson will stay on, and he’ll remain with the company for 60 days beyond that point to ease the transition.
“I am privileged to have led Perrigo, particularly as we've met the challenges we faced and stabilized the business in a time of transition,” he said in a statement.
Some analysts, though, may not agree with Hendrickson’s assessment of Perrigo’s business. Earlier Monday, RBC Capital Markets downgraded the stock to underperforom, with analyst Randall Stanicky calling erosion of Perrigo’s core consumer business “a new structural reality that has and will continue to largely offset new launch growth.”
The retirement adds “additional near-term uncertainty” to the story,” he wrote to clients Monday evening.
And just a few days before, Barclays’ Doug Tsao lowered his price target after reviewing delayed Q1 results, “recognizing turnaround and value unlock will take time.”
Hendrickson’s time at the helm started off on a shaky note for investors, with the new chief exec blasting Papa for an “unacceptable” recent track record of missing Perrigo’s own expectations--and slashing full-year earnings guidance to underscore the point that those expectations had been unrealistic from the get-go.
Not long after, shareholders sued the company for persuading them out of a Mylan sale they alleged would have left them in a better position.
Then, there was the activist pressure that ultimately forced a sale of the company's royalty stream on Biogen multiple sclerosis med Tysabri and handed five boardroom seats to Starboard Value--including one for the proxy brawler's CEO.
And then the layoffs came, first in Belgium at struggling recent buy Omega Pharma, and then across the company’s nonproduction workforce. In late February, Perrigo announced that it had approved a plan to chop 750 jobs.
With all of that in mind, whoever takes the reins from Hendrickson will have plenty on his or her plate. “Turnaround and value unlock will take time,” Barclays analyst Doug Tsao, who lowered his price target after reviewing the company’s Q1 results, wrote earlier this month.