New Valeant CEO Joseph Papa has filled another link in the drugmaker's executive ranks as he tries to forge a chain of command that is strong enough to lift the company out of the financial and legal quag in which it is mired. Valeant today said pharma veteran Paul S. Herendeen, who for the last two years has been CFO at animal healthcare leader Zoetis, has been named chief financial officer.
“His prior experience as a public company CFO, strong operational focus and disciplined approach to financial management make him the ideal choice to lead our finance function as we execute on our plans to stabilize and transform the company,” Papa said today in a statement.
Herendeen replaces Robert Rosiello, who took on the CFO title last year when former Valeant CFO Howard Schiller resigned. Rosiello, who was granted a $2.8 million retention bonus by Papa in May, will remain at the drugmaker with the title of EVP of corporate development and strategy. Papa lauded Rosiello’s work navigating Valeant through a financial restatement process, getting the company’s securities filings up to date and helping recruit Herendeen.
This is the third top executive hire Papa has announced this month as he tries to sort out and prioritize Valeant’s many issues. Novartis ($NVS) vet Christina Ackermann was brought in as Valeant’s new general counsel and Scott Hirsch, formerly of Citadel Investment Group, was named SVP of business strategy and communications.
Last week was a good example of the ups and downs the company with which the company is dealing. On Thursday, the embattled drugmaker said some changes in its credit agreements has been signed off on by lenders, giving it some breathing room as it works to pay off its $31 billion in debts. But it also had another investor pile onto its mountain of legal ills. Mutual fund behemoth T. Rowe Price Group sued Valeant on claims that its investors had lost billions of dollars on account of Valeant’s “fraudulent scheme.”
Herendeen’s experience appears to be well suited to the difficulties Valeant faces. According to the Wall Street Journal, Herendeen was enticed out of retirement to take the CFO role at Zoetis ($ZTS) two years ago. At the time, it was looking to cut costs in the face of pressure from investor William Ackman, who is also one of Valeant’s big investors.
But his background also includes about 10 years in two different stints as CFO at specialty pharma company Warner Chilcott, a drugmaker which has faced its own challenges. He was there from 1998 to 2001 and then again from 2005 to 2013, the year Warner was acquired by Allergan ($AGN).
Last year, Allergan pleaded guilty to one felony charge of healthcare fraud and agreed to pay $125 million to settle other charges related to an alleged scheme from 2011 to 2013, in which Warner Chilcott was accused of paying kickbacks in various forms to entice doctors to prescribe more meds. In June, former Warner Chilcott President W. Carl Reichel, who had been indicted for being the alleged mastermind of the aggressive marketing methods, was acquitted by a jury.
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