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.