Sector News

Endo replaces CEO, appoints M&A specialist to board in possible push for deals

February 20, 2020
Life sciences

After three years at the helm of troubled drugmaker Endo, CEO Paul Campanelli shocked analysts in November with his announcement he would step away to the chairman role.

With Campanelli’s chief financial officer taking his place and Endo bringing an M&A specialist onto its board, could the surprise transition spell a new round of transactions?

Campanelli has been replaced as president and CEO by CFO Blaise Coleman, a five-year veteran at Endo with prior roles at Johnson & Johnson and AstraZeneca, the company said in a release. Mark Bradley, Endo’s senior vice president of corporate development and treasurer, will take Coleman’s place.

The transition follows Endo’s announcement in November that Campanelli would step down in what he called “a balance of a personal life decision and at the same time, looking at the strength of the company” in a third-quarter earnings call with analysts.

Endo also announced Wednesday that it would bring on Mark Barbiero, of business and M&A consulting firm Markapital, to its board of directors. Barbiero previously worked as co-CEO and CFO for Mark IV, a global manufacturing firm, Endo said.

Campanelli’s suprise departure caught some analysts off guard, particularly because he had renewed his CEO contract only months before, in April, and Endo still faces a multibillion-dollar opioid legal overhang.

Campenelli, whom Endo brought in to right the ship after years of catastrophic decision-making, argued on the November call that he would be leaving the company in a strong position to follow his lead.

“At this stage of the game, we’ve got an exciting pipeline and a portfolio that is going to fuel this company for the long-term,” he said. “So it’s going to be an exciting opportunity, but we’re going to need somebody who can look across multiple segments and also medical aesthetics.”

But Campanelli also left the door open for possible business transactions that could enhance Endo’s pipeline and portfolio, potentially setting the stage for Coleman’s elevation and Barbiero’s appointment.

“If there is a product opportunity that could fit in with either our orthopedic or men’s health on urology side, there’s nothing stopping us from looking at appropriately sized deals for product acquisitions,” Campanelli said. “There is a database of targets and medical aesthetics. And there’s nothing stopping us to bring in small, appropriate-sized deals on the specialty and sterile injectables side for that matter.”

A possible model for what those transactions could look like? Take Endo’s 2018 licensing deal with New Jersey-based Nevakar for five sterile injectable products, a transaction Campanelli called “an opportunistic deal that we are incredibly excited about.”

Regardless of Endo’s deal-making intent, Coleman will immediately be tasked with steering an opioid legal effort that has already led to one settlement.

In August, Endo agreed to pay $10 million to two Ohio counties in a bellwether trial for major multidistrict litigation working its way through a Cleveland federal courthouse.

Extrapolating that settlement out over the thousands of suits Endo faces, SVB Leerink analyst Ami Fadia told investors the drugmaker could be on the hook for an amount somewhere in the $1.8 billion range. That’s a far cry from SVB Leerink’s previous forecast of around $4 billion.

The good news could carry over to both Mylan and Amneal, Fadia said, which might see settlements more than 50% lower than SVB Leerink’s previous estimate.

By Kyle Blankenship

Source: Fierce Pharma

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