Perrigo appoints new CEO

Uwe Roehrhoff Photo: PR

Murray Kessler is replacing Uwe Roehrhoff, who lasted 10 months in the job.

Today, only 10 months since Uwe Roehrhoff became CEO of Perrigo Company (NYSE:PRGO; TASE:PRGO), the company announced that is was replacing him with Murray Kessler as president, CEO, and director. The appointment is effective immediately.

10 months ago, Roehrhoff replaced John Hendrickson after the latter had been in office for 18 months. Hendrickson replaced Joseph Papa after the latter completed a lengthy stint as CEO, led the company's successful campaign against Mylan Laboratories' attempt at a hostile takeover of Perrigo, and unexpectedly resigned after Mylan's attempt failed. Perrigo's share lost 20% of its value while Roehrhoff was CEO, pushing the company's market cap down to $10 billion.

According to Perrigo's announcement, Kessler, a former president and CEO of Lorillard Tobacco, has a proven record of over 30 years in management positions in various consumer-oriented companies, and is committed to splitting off Perrigo's prescription drug division. Perrigo specializes mainly in over-the-counter drugs, mainly those sold under the brands of the various chains. Roehrhoff will leave his position immediately, but the company says that he will remain available in order to ensure a smooth transition.

Two months ago, Perrigo announced that it would exit the prescription drug sector, in which it produces and markets generic drugs sold by prescription only. Two years ago, activist hedge fund Starboard became a shareholder in Perrigo and began advocating the sale of this activity. Meanwhile, no buyer or other way has been found for Perrigo to dispose of its activity.

"We are excited to have Murray Kessler, a highly successful business executive, join Perrigo as its next CEO," said Perrigo chairperson Rolf Classon. "Given the decision to separate the prescription pharmaceuticals business and pursue a consumer-focused strategy, the board is looking forward to partnering with him to develop Perrigo's strategic plan… We are confident that his track record in driving shareholder value and running highly successful businesses will advance Perrigo's consumer strategy and help the Company deliver on our commitments to consumers and customers."

Kessler said, "This is a rare opportunity to drive winning results with a passionate and committed team in a high potential, consumer focused company that holds a leadership position in a broad portfolio of sizeable and recognizable categories."

"New records for instability"

"Perrigo's management instability is setting new records," writes IBI Investments pharma and medical analyst Steven Tepper, noting that Kessler is Perrigo's third CEO in two and a half years. He pointed out that Kessler has concentrated on the tobacco industry in recent years, and on other consumer products before then. "No mention was made of experience in consumer products in the health field or what he has been doing in the three years since he resigned his last position," Tepper commented.

Tepper said that the Kessler "indeed has extensive experience in anti-health consumer products, but he is inexperienced in health. At first glance, it appears that the new appointment is an attempt to position the company as a consumer products company, thereby distancing it from its status as a drug company. There is one small problem, however; the vast majority of the company's products are drugs, albeit non-prescription, but they are still drugs." Tepper lowered his target price for Perrigo's share from $80 to $72, around the market price, and recommended "market perform" for the share.

Published by Globes [online], Israel business news - en.globes.co.il - on October 9, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Uwe Roehrhoff Photo: PR
Uwe Roehrhoff Photo: PR
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