Effective Immediately: Bay Area IMPAX Labs Seeks New CEO
December 20, 2016
By Alex Keown, BioSpace.com Breaking News Staff
HAYWARD, Calif. – Impax Laboratories has terminated its relationship with Chief Executive Officer G. Frederick Wilkinson.
This morning the company issued a statement that it came to a “mutual agreement” with Wilkinson that he step down from his role as president and CEO, as well as a member of the company board of directors, effective immediately.
While the company did not provide any reasons for its decision to separate from Wilkinson, Robert L. Burr, Impax’s chairman of the board of directors, said Wilkinson was instrumental in having a warning letter removed from the company’s Hayward manufacturing facility. Burr also said Wilkinson’s leadership played a strong role in guiding the company through the approval process for its Parkinson’s disease drug Rytary, enhancing the company’s generics business and acquiring the Tower entities.
Burr said he remained confident in the company’s strategic direction, which includes its generics pipeline. In June, Impax snapped up a portfolio of generics from Teva Pharmaceuticals and Allergan for about $586 million. The deal included 15 currently marketed generic drugs, one approved generic product, two approved strengths of a currently marketed product that haven’t launched yet, one pipeline generic drug and one pipeline strength of a currently marketed drug, both of which are pending approval from the U.S. Food and Drug Administration. The deal also included commercial rights to Impax’s pending abbreviated new drug application (ANDA) for the generic version of Concerta (methylphenidate hydrochloride), which was previously partnered with Teva, and one generic drug that is currently under development.
The acquisition of those drugs actually hurt the company during the third quarter as it saw a 3 percent decline in its generics business. Following the close of the deal, the company opted to lower the price of some of the generic drugs it acquired in order to keep the Teva customer base. Although the company expected some revenue loss as a result of the reductions, its third quarter data showed a greater loss than expected.
“These reductions produced significantly lower than expected operating cash flows from the acquired product lines and triggered an impairment analysis. The company's impairment analysis resulted in the recognition of a total $251 million non-cash impairment charge to earnings on the company's consolidated statement of operations for the third quarter of 2016,” Impax said in its third quarter statement.
At the time, Wilkinson said the “ongoing impact of an increasingly challenging market environment” weighed on its generics business. As a result, the company was forced to revise its fiscal outlook for 2016.
Burr said the company is focused on finding a replacement for Wilkinson. Until a permanent chief executive is found, J. Kevin Buchi, president and CEO of TetraLogic Pharmaceuticals Corporation and a member of the Impax Board of Directors, will serve as interim CEO of Impax. Buchi took his position on the board of directors at the end of November.
“We are focused on finding a successor CEO that will lead Impax through its future growth. Until then, Kevin, who brings a great deal of pharmaceutical experience, along with a highly experienced executive management team, will lead the company," Burr said in a statement.
Shares of Impax stock are up this morning following the news. The stock is trading at $13.40 per share. Over the past year, the share price has seen a steady decline from a high of $44.12 high on Dec. 28, 2015.