10. Paul Campanelli, Endo
2018 pay: $19.97 million
2017 pay: $13.60 million
Endo isn’t out of the woods yet, as its suffering stock price suggests. U.S. generics pricing pressure is still pulling back its performance, and opioid lawsuits are still hanging over its head. But that didn't stop CEO Paul Campanelli from snagging a huge pay jump in 2018.
Campanelli, who took the CEO reins in late 2016, snagged $19.97 million in 2018 pay, up from $13.6 million the previous year. And Campanelli’s equity awards—including a special bonus sanctioned in 2017—delivered most of that boost.
Stock and options contributed $6 million to his year-over-year increase, $5 million of that as a sort of "catch-up" award. Endo's board sanctioned the bonus to increase its managers' personal investment in the company and make Endo's executive pay more “competitive” with others in the industry.
So for 2018, Campanelli's pay ranks him above U.S. Big Pharma chiefs Giovanni Caforio at Bristol-Myers Squibb and Pfizer’s ex-CEO, Ian Read.
Campanelli came over to Endo by way of Par Pharmaceutical, the generics maker Endo bought in 2015. Soon after the acquisition, U.S. generics competition worsened, and Endo’s debt load—incurred in a Valeant-like deal spree under former CEO Rajiv De Silva—was taking its toll.
So, Campanelli initiated a turnaround plan that focused Endo on sterile injectables, “high-barrier, technically challenging generic products,” and specialty drugs, and aimed to cut its debt burden.
In 2018, though generics continued to decline, Endo’s core specialty drug Xiaflex increased sales by 24% to $265 million, and its entire sterile injectables portfolio delivered 24% sales growth. The company is also expecting to file a new formulation of Xiaflex, CCH—which could be the first injectable for cellulite—in the second half of 2019.
Nevertheless, Endo’s shares have been under pressure since the fourth-quarter earnings report, “with twin concerns over the sustainability of the company’s ex-injectables generics business and then from competitor news on the opioid litigation front,” Canaccord Genuity analyst Dewey Steadman noted in a March memo to clients.
In Steadman’s view, Endo's opioid crisis is a problem much smaller than OxyContin maker Purdue Pharma’s. In terms of potential monetary damages from the nationwide litigation—which now spans thousands of lawsuits claiming drugmakers fueled the country's addiction crisis—Endo will likely see a “manageable number.”
Meanwhile, Endo’s brands and injectables businesses—both are high margin and highly durable—are looking at a good year in 2019, Steadman said. But Endo’s sterile injectables ambitions suffered a blow recently as it pulled out of a deal to buy Somerset Therapeutics due to uncertainty over regulatory approvals in India.