Trading Pharmaceutical Chairs

Earlier today Barr Pharmaceuticals BRI (NYSE) announced that Paul M. Bisaro, President and Chief Operating Officer resigned to take the president and chief executive position at its competitor Watson Pharmaceuticals Inc. WPI (NYSE). Bisaro has been with Barr since 1992. In 1999 he was made president and chief operating officer. Bisaro will join Watson in early September at which time he will replace the current ceo and president Allen Chao. Chao will remain chairman and Bisaro will join the company's board.

In its announcement, Barr's chairman and CEO Bruce Downey stated,

"We regret that Paul has accepted a position with Watson Pharmaceuticals," ....... He went on to say, "I can understand his desire to assume a position of higher visibility and responsibility, and I wish him well."

Watson has been showing some mixed signals to the market lately. In is latest release of second quarter results the company beat forecasts but overall sales were a bit lower than the consensus of analysts predictions. Bisaro may be just the right medicine for Watson. He has been waiting for some time to get the chance to lead and Watson is a perfect opportunity for him and the right kind of company. He is well versed in the industry. He was considered a key player in Barr's recent efforts to assimilate Pliva into its business. Pliva, the Croatian drug company, was acquired by Barr. He also has a legal and financial background which has been successfully combined with operational skills.

Stay tuned to his moves over the next few months.

For more see:

Forbes
CNNMoney
Reuters
MSN Money

TV Appearance on Business News Network

FYI: Thursday Morning at 10:35 am, I was interviewed on Canada's Business News Network. The interview entitled Fresh Blood at the Top can be viewed for a week on www.bnn.ca.

Is Gap's New CEO a Good Fit?

Can the Gap GPS (NYSE) manage to get its mojo back with a new CEO out of retailing rather than clothing? Investors and competitors are all wondering.

Yesterday, Gap's board of directors announced the surprise appointment of Glenn K. Murphy as it long awaited new Chairman and CEO. Murphy before his appointment had been the highly successful Chairman and CEO for six years of Canada's largest drug store chain, Shoppers Drug Mart from which he left in March of this year. Murphy, an experienced retailer, has no experience in clothing. Is his expertise and executive acumen enough to turn the languishing clothing icon around? Opinions are all over the map but at a minimum at least, the Gap has finally found a new leader.

The Gap has been undergoing an extensive six month search for a new CEO. In today's New York Times an article by Michael Barbaro stated:

"According to people briefed on the search process, Gap put out feelers to several highly regarded apparel industry figures, like the chief executive of Avon, Andrea Jung, a former Neiman Marcus executive. But these executives said they had little interest in the job."

The challenge to turn the Gap around is huge and it is not for the timid. Most clothing experts are probably skeptical about Murphy's appointment. According to a piece in the Los Angeles Times by Kim Yoshino and Leslie Earnest,

Murphy's appointment was greeted with skepticism by Marshal Cohen, chief industry analyst at NPD Group, a market research firm. ...."It's deja vu all over again' he said, 'where's the beef? Where's the merchant? I need to a merchant in this. Merchandise is such a critical component of the equation.... They're running out of chances here."

There was further negative comments in TheStreet's piece when the writer asked Howard Davidowtiz, chairman of Davidowitz and Associates, a retail consulting and investment banking firm, about the appointment. Davidowitz stated,

"...he is puzzled by Gap's choice of leadership.... The people who drive companies are fashion geniuses -- the people who fall on their face are people who are not."

There are many analysts, however, who have expressed their approval of the appointment. Don't expect quick miracles. Follow the moves and statements by the new CEO as he ventures into unknown territory. He has real talent and keen executive skills, the real question is will he be able to get his clothing merchandisers to bring back the excitement and reinvent the Gap and its other brands.

For more see:

BusinessWeek Update (Nov. 23)
MSNBC Slumping Gap jettisons 1,500 workers
Seeking Alpha
Motley Fool
TheStreet update
Schaeffer's Research
Globe and Mail
Women's Wear Daily
Toronto Star
Forbes
NY Post

Aspreva Pharmaceuticals Reorganizes

A few weeks back, I highlighted the positive change at the top of Aspreva Phamarceuticals - the appointment of J. William Freytag, PhD as CEO. In just a few weeks since Freytag's appointment, Aspreva announced a restructuring the company claims is intended for long-term future growth. The current chief scientific officer, Dr. Richard Jones, will be leaving the company. His responsibilities will be assumed by Dr. Usman Azam, Aspreva's Chief Medical Officer. The company also plans to reduce staffing levels worldwide by 25%.

For more see:

Press Release

CEO Revolving Door at SM and A

Michelle Leder's latest entry into her Footnoted blog is worth a read. She focuses on the recent CEO drama at SM and A WINS (NASDAQ), a provider of business strategy and proposal development services. The company announced on July 19th that its Board of Directors entered into a multi-year agreement with Cathy McCarthy to become President & CEO of the company effective immediately. McCarthy's appointment follows Cynthia A. Davis' resignation from the Company as well as its Board of Directors, which was accepted a day earlier. Ms. Davis had served as CEO since April 2007. Ms. McCarthy was previously President and Chief Operating Officer of the Company. Obviously there is more here.

Princeton Review Nabs High Profile CEO

Princeton Review REVU (NASDAQ), a leading provider of test preparation services and educational support services, in press release today announced:

"... it has reached a definitive agreement with Bain Capital Ventures and Prides Capital under which the two private investors have made a $60 million of preferred stock investment in the company. The preferred stock will be convertible into common stock at $6.00 a share and for four years will accrue a six percent annual dividend. Additionally, in connection with the agreement, the Company will retire its B- 1 Convertible Preferred Stock. The Princeton Review also announced that Michael J. Perik, former CEO of The Learning Company, will become the new Chief Executive Officer of the Princeton Review, effective immediately. He succeeds the company's founder, John S. Katzman, who will remain as Executive Chairman."

The selection of Perik is a very positive choice. Perik has shown himself over the years to be a highly successful CEO. His background in developing the Learning Company into a powerhouse software company and his more recent and earlier work in private investment will only help him in his new position with the Princeton Review. He ultimately sold the Learning Company to Mattel at just the right moment. Keep a very close eye on the Princeton Review.

For more see:

NY Times Dealbook
Dealbreaker
Reuters
Crains

Shareholder Activism - Management Impact

A recent article in Taking The Street attempts to analyze the impact of shareholder activism on management and overall corporate performance from an investment perspective. The pices is worth a quick read.

Novartis CEO Successor May Have Been Selected

According to an article in the Swiss weekly SonntagsZeitung, picked up by Forbes 7/23/07, Novartis AG NVS (NYSE) chief executive Daniel Vasella might propose current Vaccines & Diagnostics chief executive Joerg Reinhardt as his successor.

The Importance of Corporate Management

Liberum Research and its parent company The Wall Street Transcript are based on the importance of corporate management. Don't take our word on management's importance, check out Whitney Tilson's piece in The Financial Times on July 20th. Tilson quotes a number of top investors on why they think management is important as an investment tool.

Are Weeds Growing at Miracle-Gro?

Over the last few days Scotts Miracle-Gro Company SMG (NYSE) announced the immediate departure of two executives at the firm. Christopher L. Nagel, executive vice president of the Company's North American consumer business and David M. Aronowitz, executive vice president, general counsel and corporate secretary both departed the company without delay. In one of the announcement's the company indicated, "the departure was neither related to the Company's performance nor concerns about its financial controls". The back-to-back departures are somewhat curious and typically raise a red flag for Liberum. I would definitely keep an eye on the company. The dual departures were also highlighted in today's footnoted.org blog.