Sector News

Here’s what’s next for Hospira’s CEO after Pfizer deal

February 9, 2015
Life sciences
Hospira CEO F. Michael Ball is in an admirable position. His turnaround effort at the large injectable-drug maker snagged a coveted offer from pharmaceutical giant Pfizer, which plans to pay nearly 40 percent more per share for Hospira’s stock than it was worth just a day before the deal was announced.
So what’s Ball’s fate? Analysts say he’s not likely to stick around.
“I would be really shocked to see him stay on at Hospira,” said Michael Waterhouse, an analyst at Chicago-based Morningstar.
New York-based Pfizer announced plans yesterday to buy Lake Forest-based Hospira for $17 billion. It’s not clear who Pfizer plans to retain from Hospira, but Ball has earned a reputation for being able to boost the performance of a large, ailing company, said Kevin Kedra, an analyst at Gabelli.
Ball pumped more than $487 million into product and quality improvements to address concerns from the U.S. Food and Drug Administration, mainly with troubled manufacturing plants. He inherited a low performer when he took the reins of Hospira in 2011.
In the last 12 months, Ball has boosted the stock price from a low of nearly $41 on March 26, 2014, to a high (until Pfizer’s announcement) of about $67 a share on Jan. 26—a 63 percent hike.
“Given the job he’s done here, I would think he’d be very much in demand” to become the CEO of another company in need of a turnaround, Kedra said.
If Pfizer ends up splitting into two companies, Ball would have a shot at another leadership role, Kedra added.
A Hospira spokeswoman did not return messages to comment. Pfizer executives haven’t provided specifics about its future team.
“We are very well-aware that Hospira has a lot of talented individuals and have been very successful, as our organization has been successful, so we look to create a combined organization that has the best talent from both organizations,” Pfizer CEO and Chairman Ian Read told analysts during a conference call yesterday.
Meanwhile, the merger could mean job losses at Hospira. Pfizer aims to cut $800 million in costs in the wake of the deal, and analysts say the only way to get there will be through trimming jobs.
“I don’t see how they do that without firing (employees),” said Ronny Gal, a senior research analyst at Sanford Bernstein. “Some of it will come from their business presumably, but I don’t see how they would do that without taking out a lot of the cost structure of Hospira.”
Hospira has about 19,000 employees worldwide.
The deal is expected to close in the second half of the year. Hospira shares closed at $87.64 yesterday.
By Kristen Schorsch

Related News

September 18, 2020

Eli Lilly, Amgen join forces to scale production of COVID-19 antibody cocktails

Life sciences

Months of fervid research have whittled away most potential options to treat patients with COVID-19, a group of antibody cocktails still hold promise. Eli Lilly believes so strongly in its contender that it’s […]

September 16, 2020

Takeda unveils new Boston R&D manufacturing center for cell therapy pipeline push

Life sciences

Japanese drugmaker Takeda has trumpeted its plan in recent years to cut billions of dollars in costs and pivot around oncology and rare diseases. A key part of that strategy […]

September 15, 2020

AstraZeneca, Oxford restart stalled COVID-19 test as Pfizer ramps up trial numbers for its vaccine

Life sciences

Just under a week after it stopped its key phase 3 pandemic vaccine test, AstraZeneca and the University of Oxford have been given the green light to restart in the […]