After a decision this summer to sell its prescription unit to focus on OTC products, Perrigo is in store for another management change. Uwe Roehrhoff is out as CEO after a short stint and former tobacco executive Murray Kessler is in, the company announced Tuesday.
In a move that analysts called either surprising or very surprising, Perrigo said that Roehrhoff would down immediately. He’ll remain available to assist during a transition period, the company noted.
With that, Kessler is set to take the reins right away. He’s an executive with three decades of leadership experience at several consumer products goods companies, including a five-year stint as CEO of the Lorillard Tobacco Company before it sold to Reynolds American for about $27.4 billion, Wells Fargo analyst David Maris wrote in a note to clients. Kessler also has management experience at Vlasic Foods, Campbell Soup, Clorox and UST Inc., a subsidiary of tobacco company Altria.
In a note titled “back to square one,” Jefferies analyst David Steinberg pointed out that despite Kessler’s “impressive” track record, the new CEO has no prior pharma experience. He added that it “remains unclear how the leadership team will unlock value and grow [Perrigo’s] consumer healthcare business.”
The move follows Perrigo’s August decision to sell its specialty pharma business after two years of activist investor pressure. Instead, the company plans to focus on OTC growth going forward. In its announcement, Perrigo chairman Rolf Classon said the company’s board is confident Kessler’s “track record in driving shareholder value and running highly successful businesses will advance Perrigo’s consumer strategy and help the company deliver on our commitments to consumers and customers.”
Perrigo is still deciding exactly how to split its prescription business. When it disclosed its intention to focus on OTC products, the company said it’d consider a “tax-efficient separation to shareholders,” a sale or a merger.
Before the decision, the company faced years of activist investor pressure from Starboard Value. In February, it handed over five board seats to the firm. Starboard Value started pressing for a split back in September 2016.
Roehrhoff only joined Perrigo in January, following a 13-month tenure at the helm by John Hendrickson. Hendrickson replaced Joseph Papa when Papa left to lead Valeant, now known as Bausch Health Companies.