Another disciple of Valeant Pharmaceuticals and its price-hiking credo is bidding farewell to its CEO.
Concordia Pharmaceuticals said Friday that its founder and current helmsman Mark Thompson would step down as soon as the Canadian drugmaker finds a replacement.
Concordia didn’t give a reason for the switch, noting only that Thompson and the board agreed that “this would be the ideal time for a leadership change.” But he’s not the only chief exec to exit his role in what’s been a tricky year for specialty drugmakers, Concordia included.
Valeant saw J. Michael Pearson to the door in late April, bidding goodbye to the architect of its buy-and-raise-prices strategy that’s landed the company in plenty of hot water. At the time, the company was struggling under negative short-seller commentary, price-hike pushback and formulary exclusions--all of which Concordia currently faces.
And just last month, another drugmaker that seemed to take a page from Valeant’s playbook--Endo--parted ways with its CEO. Rajiv De Silva joined Endo from Valeant, where he was president, and as the pricing debate heated up over the past year, his company has been burned badly for some of its moves.
Thompson himself has roots in Valeant's past; he was a VP of business development at Biovail, which Valeant later acquired to move its domicile to Canada.
Like many of its peers that have come under fire for raising prices on older meds, Concordia’s price-jacking is nothing new. In June of 2014, the company raised the price on a decades-old irritable bowel syndrome product it had purchased, Donnatal, taking it to $602 from $353 per prescription. This year, Donnatal sold for $782 per prescription, an 800% increase over its 2010 price.
And more recently, price hikes ensued after Concordia bought Amdipharm Mercury from private equity firm Cinven; 16 of Amdipharm’s meds charted price increases after September 2015, the month the companies announced their deal. One clotting med’s price soared by 119% between that month and April 2016.
PBM giant CVS Health, for one, hasn’t been taking the moves lying down. It iced out a hyperinflationary med from Concordia--alongside one from Valeant--when it put together its 2017 formulary.
Concordia also ran into trouble with a short-seller earlier this year, when Marc Cohodes, a former employee of short-selling hedge fund Rocker Partners, criticized Thompson’s former employer, Biovail.
“The management of Concordia, their past gig was at something called Biovail, which I was short a long time ago [and] was a complete and utter fraud. So [Mr.] Thompson has a history of nonsense when he was at Biovail,” Cohodes said during a TV appearance on a Canadian financial news channel, words that prompted a libel lawsuit from Thompson.
All in all, the company’s stock has taken a beating as of late, sinking by nearly 80% between this July and last, which can't be endearing Thompson to shareholders. Concordia says its search for a new chief is already underway.
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