Valeant Pharmaceuticals International Inc. is finalizing a contract to hire Perrigo Co.’s chief executive officer, Joseph Papa, the Wall Street Journal reported.
Valeant had been aiming to announce the move as early as next week, but the appointment has hit a roadblock as the Perrigo board hasn’t said whether it would allow Papa to void a non-compete clause in his contract, the publication reported, citing people familiar with the matter.
Valeant said in March that CEO Mike Pearson would leave the drugmaker once a replacement was found, part of a broader overhaul that included adding activist investor Bill Ackman to its board. Ackman said earlier this month that the company was “weeks and not months” away from finding a replacement CEO, a job he said was “extremely attractive” to many candidates. Both Valeant and Perrigo declined to comment.
Laval, Quebec-based Valeant has suffered multiple controversies and setbacks in recent months after drawing scrutiny over its business practices, accounting and drug pricing. It delayed filing its 2015 financial statements while an ad-hoc committee of the board reviewed its relationship with mail-order pharmacy Philidor Rx Services LLC. In February, Valeant said it would restate financial results from 2014 and 2015 related to Philidor.
Papa successfully fended off Mylan NV’s $26 billion hostile takeover attempt for Dublin-based Perrigo last year. He joined Perrigo in 2006, according to the drugmaker’s website. Before that, he held management positions at companies including Novartis AG and Watson Pharmaceuticals Inc. Perrigo sells over-the-counter and prescription medicines, as well as other products such as infant formula. The company’s shares have lost about 36 percent over the past year.
If Papa’s appointment at Valeant goes through, he would be tasked with navigating the drugmaker through several challenges. Valeant’s failure to file financial statements by their original deadline has already angered its lenders, with the company having to seek an amendment and waiver to its bank credit agreement. Earlier this year, Valeant said it was under investigation by the U.S. Securities and Exchange Commission. Valeant shares have lost more than 80 percent over the past year.
Perrigo’s board had a call on Thursday and didn’t arrive at a decision, the WSJ reported, citing people familiar with the matter. Valeant considers the overlap with Perrigo to be limited, the publication said.