Endo Replaces CEO De Silva With Campanelli After Stock SlumpBy and
Campanelli joined in ’15 when Endo bought Par Pharmaceutical
Shares gain 15% after announcement, most since August
Endo International Plc, the struggling maker of painkillers including Percocet, replaced its chief executive officer after the stock slumped 73 percent in a year, promoting Paul V. Campanelli.
The move is effective immediately, and Campanelli, in his first conference call as CEO, said he will review various business lines and make “tough decisions.”
“I am going to be going to all our leaders to make an assessment of all our teams,” he said. “If there are certain areas we need to improve on, we have to make tough decisions.”
The shares rose 15 percent to $23.39, the most since Aug. 9. Even with the gain, the stock is the worst performer on the Standard & Poor’s 500 Index in the last year.
Campanelli, until now president of Endo’s generic and over-the-counter drugs business, joined last year as part of the acquisition of Par Pharmaceutical. Departing CEO Rajiv De Silva, who left after 3 1/2 years, said in a statement Friday that it’s time to move to new professional opportunities and he will work with the board and management team to ensure a smooth transition.
Endo, which is run from the U.S. but has a Dublin legal address following a so-called inversion, has been suffering from increasing competition. Its pain drug unit also faces stronger government guidelines limiting the use of opioids.
Roll-Up M&A Model
Campanelli, 54, spent much of his career leading and operating complex generics businesses and overseeing Par’s branded business, according to the statement. De Silva, who had joined Endo from Valeant Pharmaceuticals International Inc., followed the same business model -- a series of deals to quickly expand the company. He bought Par for about $8 billion last year in an effort to reignite sales.
The departure is “encouraging, in the long term” as it signals “the diminishing importance of the roll-up M&A model,” Leerink analyst Jason Gerberry, who rates the shares the equivalent of neutral, wrote in a note to investors before the analyst call.
The new CEO didn’t rule out future acquisitions in the branded units or generics business.
“If we find a brand product that fits our criteria, and can drive our long-term value, that’s going to be strongly considered,” he said on the call. “We’ve got to be in the mix, and we have to be on the pursuit for opportunities.”
Endo also reaffirmed its third-quarter and full-year forecasts. The company expects earnings per share, excluding some items, of 77 cents to 82 cents. Analysts anticipate 82 cents, on average.