June 11 (Bloomberg) -- Omnicare Inc., a supplier of drugs to nursing homes, said Chief Executive Officer John Figueroa resigned, effective immediately. The shares fell the most in eight months.
John Workman, Omnicare’s president and chief financial officer, will take over as interim CEO while the company looks for a permanent replacement. Figueroa, 49, had held the position for 18 months. Nitin Sahney, executive vice president of specialty care, will be promoted to chief operating officer, the Covington, Kentucky-based company said in a statement today.
James Shelton, Omnicare’s chairman of the board, said in the statement that Figueroa, 49, was leaving after having “accomplished the goals we established.” The statement didn’t provide a further reason for Figueroa’s resignation. Figueroa won’t stay on the board, according to the statement.
Shelton, in a telephone interview, said the company’s board started talking with Figueroa “several weeks” ago in a conversation that “led up to a discussion late last week in which John reached the decision that he was going to resign.” While Figueroa offered to stay for another two months to help with a transition, the company chose not to delay his departure, Shelton said.
Omnicare shares fell 8.9 percent to $30.40 at the close in New York, the biggest single-day decline since Oct. 4.
On May 11, Omnicare settled a case with the U.S. Department of Justice for $50 million. The agency called it the “largest controlled substance settlement in history,” and said that Omnicare gave nursing home residents medicines without a prescription, with missing prescription information, or not documenting prescriptions.
Workman said in an interview that the settlement wasn’t a factor in Figueroa’s resignation, because the events that the Justice Department had investigated took place before Figueroa was CEO.
Earlier this year the company also saw its attempt to buy its largest competitor, PharMerica Corp., blocked by the Federal Trade Commission. In February, Omnicare dropped the hostile, $441 million offer for PharMerica.
The company is looking for acquisitions, and could spend as much as $150 million a year expanding its long-term care business, Workman said. Omnicare may also buy a specialty pharmaceutical distributor.
“We’re not averse to looking at larger acquisitions if they’re not too far from our core and would have a good return for shareholders, and generate cash,” he said.
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