The shakeup in the executive ranks at Valeant Pharmaceuticals International Inc. continues with the appointment of a new chief financial officer.
The Laval, Que.-based drug giant said on Monday it has hired Paul Herendeen as executive vice-president, finance. Mr. Herendeen is leaving animal health company Zoetis Inc., where he had been CFO for the past two years.
Current Valeant CFO Robert Rosiello is stepping down immediately but will stay on to oversee corporate development and strategy at embattled Valeant.
The move follows the reassignment of three senior Valeant executive to more global portfolios and new hires in key positions in the company's legal and communications departments earlier this month as new chief executive officer Joseph Papa tries to engineer a major turnaround at the company.
Mr. Papa joined Valeant in April and faces a bevy of challenges, including reducing a debt load of more than $30-billion (U.S.) via asset sales, getting more new drugs in the pipeline and dealing with several legal actions related to a failed growth-by-acquisition strategy and the collapse of its stock price.
Mr. Rosiello was one of three executives at Valeant who took over the management of the company after former Valeant chairman and CEO Michael Pearson took a leave of absence late last year. Mr. Pearson, who spearheaded Valeant's controversial growth strategy, eventually stepped down and was replaced by Mr. Papa but has stayed on as a consultant.
Adding to Valeant's legal woes, last week two major institutional investors said they are suing the company and six current and former top executives for allegedly engaging in "a fraudulent scheme" costing shareholders billions of dollars.
In court filings, mutual fund giant T. Rowe Price Group Inc. and insurance firm Alleghany Corp. allege that Valeant resorted to deceptive practices such as refilling patients' prescriptions without permission and pushed the sale of its high-priced medications through a secret channel of pharmacies across the U.S.
Valeant said it intends to defend itself and declined further comment. None of the allegations have been proved in court.
Mr. Herendeen, the new CFO, has more than 30 years of "broad financial experience and leadership," including a stint as CFO at drug firm Warner Chilcott Co., Valeant said in a news release Monday.
"Paul is an accomplished and well respected financial executive, and we are delighted to welcome him to Valeant," Mr. Papa said.
"His prior experience as a public company CFO, strong operational focus and disciplined approach to financial management make him the ideal choice to lead our finance function as we execute on our plans to stabilize and transform the company."
Since reaching record highs last August, Valeant stock has collapsed by about 90 per cent after its relationship with Philidor RX Services LLC, a now-defunct mail-order pharmacy based in Pennsylvania, came to light and its practice of aggressively increasing the prices of its drugs faced more scrutiny from U.S. lawmakers.
The company also faces class-action lawsuits and is co-operating with an investigation by the U.S. Department of Justice. It is also being investigated by the U.S. Securities and Exchange Commission and the Internal Revenue Service is preparing an audit. The Wall Street Journal reported two weeks ago that Valeant is under criminal investigation.
With files from Christina Pellegrini