Saturday, October 25, 2014
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Endo Health Solutions' new CEO is Rajiv De Silva

Endo Health Solutions Inc., said that Rajiv De Silva, a pharmaceutical executive who had been president of Valeant Pharmaceuticals and a senior executive at Novartis, will start March 18 as the new president and chief executive officer.

Endo Health Solutions' new CEO is Rajiv De Silva

Endo Health Solutions, Inc., now has a new chief executive officer to go along with a new headquarters in Malvern, as the board of directors announced Monday that Rajiv De Silva will lead the drug and device company.

Investors hope the stock price, revenue and profits will also take a new direction — higher, of course — when the former Novartis and Valeant Pharmaceuticals executive takes over on March 18. Dave Holveck announced late last year that he would retire.

De Silva, 46, will make $975,000 in salary and more through incentives and stock options, but he did not land this job because he mixed molecules in a lab. He earned degrees in civil engineering at Princeton and Stanford before getting his MBA at Wharton. After time at McKinsey & Co., he worked for Novartis and then Valeant Pharmaceuticals, where he was involved in the acquisition and integration of 40 companies.

“The board was focused on execution and continuing to integrate our four businesses,” Endo board chairman Roger Kimmel said during a conference call with financial analysts. “We were looking for someone with substantial operating experience.”

Founded as a separate company in 1997, Endo Pharmaceuticals adopted its current name — Endo Health Solutions — in May 2012 to reflect its diversification, through recent acquisitions, to areas of care (pain management, pelvic health, urology, endocrinology and oncology) and types of businesses (branded and generic drugs, devices, technology and services.)

But profiting through efficiency has been challenging, accentuated by regulatory and competitive hurdles related to key pain products, Lidoderm and Opana ER.

Endo reportedly reached out to other companies, including Valeant, to explore being bought out. Amid that, Endo signed a 12-year lease to move from Chadds Ford into a new building with 300,000 square feet of space in Malvern, where about 700 of the company’s approximately 4,600 employees work.

“We were not of the view that Endo would end up being sold, so we think getting Rajiv as CEO was probably the next best outcome,” Gary Nachman, of Susquehanna Financial Group, wrote in a note to clients. “However, we remain cautious on Endo’s fundamentals across many of its businesses, and believe Rajiv certainly has his work cut out for him.”

The stock closed Monday at $30.26, up 7.9 percent. But almost every analyst asked Kimmel and De Silva about the possibility of being bought out or selling parts of the company. Neither would answer directly, though Kimmel said the board had the fiduciary responsibility to remain “flexible,” and De Silva said he would assess the situation as quickly as possible.

“I fully understand this is a critical time for Endo,” De Silva said. “I don’t let a lot of grass grow under my feet.”

De Silva had been Valeant's president and chief operating officer of specialty pharmaceuticals when he announced in September of 2012 that he was departing to pursue other interests, which clearly were to be a CEO somewhere.

De Silva had worked with Valeant CEO J. Michael Pearson at McKinsey & Co.

"The Board of Directors and I appreciate the significant contributions Rajiv has made these past few years since joining me on this journey to create a new pharmaceutical operating model," Pearson said in a statement when De Silva's departure was announced in September. "Under Rajiv's leadership, we have become a leader in the U.S. dermatology space and transformed our operations in Canada and Australia. And although his leadership will be missed, the company has created and developed a strong management team with Rajiv's assistance that I am confident will lead us successfully through this transition period and into the future."

 

David Sell
About this blog
David Sell blogs about the region's pharmaceutical industry. Follow him on Facebook.

For Inquirer.com. Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Reach David at dsell@phillynews.com.

David Sell
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