Quick Take: Pharma Veteran Joseph Papa Joins Valeant

 

Valeant CEO Joseph Papa (CNBC photo)

 

Media agencies today reported that Joseph Papa, who resigned from troubled pharmaceuticals company Perrigo Co., will join Valeant (NYSE: VRX) as its new CEO in May. The announcement triggered a share price hike in today’s mid-trade, although it closed 2.28% lower at end of trading. Papa appears to be well regarded, having been in the healthcare industry for 30 years. His departure from Perrigo triggered a sell-off of Perrigo’s stock.

The new CEO’s to do list will be long:

  • Decide on the sustainability of its business model. Can the company still rely on M&A to grow?
  • If not, how can Valeant grow its R&D budget amidst abysmal debt levels?
  • Can it hire the right people to grown its R&D? Can it convince smart and talented scientists to join a company whose reputation is in tatters?
  • Can it still rely on a pricing strategy that by all intents and purpose, is predatory?
  • Can it end regulatory investigations and avoid even more negative consequences?
  • How can it restore trust and confidence of shareholders and regulators?

By leaving one embattled company for another, Papa must be a man who loves challenges. Whether or not he manages to surmount Valeant’s  remains the big question.

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