Valeant names former CFO Schiller interim CEO as Pearson remains hospitalized
- Valeant Pharmaceuticals announced on Wednesday that Howard B. Schiller has been appointed as the company's interim CEO as chief J. Michael Pearson continues his medical leave of absence after being hospitalized for severe pneumonia.
- Pearson's medical leave was announced on December 28, and he's been in the hospital since the week of the 21st. Until now, a three-person board comprised of Valeant general counsel Robert Chai-Onn, group chairman Ari Kellen, and CFO Robert Rosiello had been running the show through an interim "Office of the Chief Executive Officer."
- Schiller is a former Valeant CFO (from late 2011 through the summer of 2015) who remains on Valeant's Board of Directors. The firm also announced that Lead Independent Director Robert Ingram will serve as the interim chairman of the board.
Valeant's been missing its head honcho for nearly two weeks now, and investors have been voicing their concerns. After Pearson's medical leave and the CEO-by-committee was announced last Monday, the pharma's shares dropped more than 10% and hasn't improved much since then.
The company said on Monday that it's unclear exactly when Pearson will be well enough to return to his duties. "As Mike's medical leave continues, and the timing of his recovery and return remains uncertain, Howard will now step in as CEO on an interim basis," said Ingram in a statement. "Howard's performance as Valeant's CFO, as well as his deep understanding of Valeant's operations, are excellent and we are grateful that he has agreed to take on this role."
Valeant's desire to assure investors and the public that there is a steady hand guiding the wheel is understandable considering the roller coaster that the company's been on ever since Andrew Left and Citron Research accused it of Enron-like fraud in its distribution network.
The company has been on a mission to regain investor confidence after shedding nearly 70% of its market value in the months following the Philidor Rx accusations. Some of these tactics, especially the announcement of a 20-year distribution deal with Walgreens, have had their intended effect. But stakeholders began to grow nervous again following the uncertainty over Pearson's health.
Schiller appears to be an obvious choice for interim CEO considering his longstanding relationship with the company and previous executive experience there during a period of solid growth for Valeant.
At least one outspoken investor, Bill Ackman (whose firm Pershing Square actually trimmed its investment in Valeant recently), voiced enthusiastic approval for the decision. "We think Howard will do an outstanding job and have enormous confidence in him," Ackman told CNBC in a statement. "Howard benefits from having worked alongside [Pearson] for many years and having remained on the Board since he stepped down as CFO."
Valeant shares were fairly flat at the market open on Wednesday.