Stryker CEO Leaves Abruptly; JJ Taps Device Chief as New CEO

Stryker CEO Leaves Abruptly; J&J Taps Device Chief as New CEO

It’s starting again. Another class of top medical device executives is graduating to the next phase of their lives, leaving behind the companies they’ve led for a significant portion of their careers. This year’s group is being led by Stryker Corp. Chairman, President and CEO Stephen P. MacMillan and Johnson & Johnson Chairman and CEO William C. Weldon. The pair announced their resignations within two weeks of each other last month.

MacMillan, 48, led the 2012 parade of departing CEOs, stepping down immediately on Feb. 8 for “family reasons.” Neither MacMillan nor executives with the Kalamazoo, Mich.-based company he has led since 2005 elaborated on those reasons at the time, preferring instead to publicly wish each other well. William U. Parfet, lead independent director of Stryker’s board, said the company understood MacMillan’s decision to resign and wished him well in his future endeavors. MacMillan retorted by expressing his confidence for Stryker’s continued success with new leadership. “As I look ahead to the next chapter in my life, I remain confident that the team will continue to execute Stryker’s strategy with distinction and the company will enjoy continued success in the future,” he said in an official

statement. Rumors have begun to swirl subsequently about an inappropriate relationship with an ex-employee that forced his exit. For now, the burden of that continued success will fall upon the shoulders of Parfet, who is now non-executive chairman, and Vice President and Chief Financial Officer Curt Hartman, who will serve as interim CEO until a permanentreplacement is found.

Hartman joined Stryker in 1990 and has held various leadership positions over the last 22 years, including six years as global president of Stryker Instruments. He was named to his current post in April 2009. Hartman has a Bachelor of Science degree in aerospace engineering from the University of Michigan and completed the Advanced Management Program at Harvard Business School.

Parfet has been a board director at Stryker for nearly 20 years. For the last 13 years, he’s been chairman and CEO of MPI Research, Inc., a Mattawan, Mich.-based drug safety and pharmaceutical development company. He also is a director at Monsanto Company, an agricultural products provider, and Taubman Centers, Inc., a real estate development company headquartered in Bloomfield Hills, Mich.

Much of the Stryker’s future success, of course, will depend on the challenges that confront the company and the ways in which its leader—whether it is Hartman, Parfet or an outsider—responds to those trials. MacMillan has won praise from both industry analysts and fellow chief executives for his growth strategy (the dozen or so companies Stryker acquired during his tenure both diversified the firm’s product offerings and enabled it to enter new markets) as well as his ascetic guidance in resolving a federal probe into off-label use of a human bone growth product (that same steely command also helped the company resolve four warning letters from the U.S. Food and Drug Administration).

“He initiated the diversification practices,” BMO Capital Markets analyst Joanne Wuensch told Bloomberg. “He’s been at the forefront of saying, ‘How do I take this company and move it into a very different orthopedic market?’ ”

MacMillan has moved Stryker into a different orthopedic market practically since he joined the orthopedic implant manufacturer as president and chief operating officer in 2003. He became CEO in January 2005.

MacMillan began his medical career in 1985 with Procter & Gamble, and later spent 11 years with Johnson & Johnson, eventually becoming president of the joint venture between J&J and Merck. In 2000, he joined Pharmacia Corporation’s executive committee, where he supervised five global businesses with revenues exceeding $2 billion, according to a biography on Stryker’s website.

That biography also states that MacMillan serves on the boards of directors of Texas Instruments Inc., the GreaterKalamazoo United Way and the Washington, D.C.-based Advanced Medical Technology Association. But it is not clear whether the “family reasons” that forced MacMillan to resign from Stryker will cause him to step down from those boards as well. Other memberships and appointments also are in question, including the Institute of Medicine’s Roundtable on Value & Science-Driven Healthcare, and his two-year term on the U.S. Manufacturing Council, a group that advises presidential administrations on ways to create more American manufacturing jobs.

MacMillan received a B.A. in economics from Davidson College in Davidson, N.C.,and the graduated from Harvard Business School’s advanced management program.

J&J’s New CEO

Less than two weeks after MacMillan left his post, J&J announced Weldon’s resignation and named Alex Gorsky as his successor. The transfer of leadership will officially take place at thecompany’s upcomingannual shareholders meeting on April 26. Weldon, 63, will remain J&J board chairman.

Gorsky, 51, is a former army captain and endurance athlete who has spent two decades at J&J, most recently leading the Medical Devices & Diagnostics Group, Global Supply Chain, Health Care Compliance & Privacy and Government Affairs & Policy. He also currently serves as vice chairman of the company’s executive committee.

“Gorsky is a conservative choice and the strongest internal candidate,” Erik Gordon, a business professor at the University of Michigan in Ann Arbor, told Bloomberg. “That’s a big deal at a company that always taps an insider as its next CEO—even if what they need is someone from outside the team that led the company into so much trouble.”

Weldon, 63, has been blamed for much of J&J’s troubles of late. The son of a Broadway stagehand and seamstress, Weldon became CEO in 2002 after spending his entire career at the company. Critics have accused Weldon of allowing the company’s once-staunch attention to quality erode through the years, resulting in the manufacture of drugs with foul odors, adulterated ingredients and/or bad labeling as well as metal hips that wore out and failed long before they should have. J&J’s DePuy unit faces more than 4,500 lawsuits over the ASR XL Acetabular System, a hip socket used in traditional replacementsurgery, and the ASR Hip Resurfacing System, a partial hip replacement that involves placing a metal cap on the ball of the femur to preserve more bone. Both products were recalled in August 2010; to date, J&J has recalled 93,000 hips worldwide, including 37,000 in the United States, warning that more than 12 percent failed within five years.

When he assumes leadership of the company in late April, Gorsky will become only the ninth CEO in J&J’s 126-yearhistory, according to Bloomberg. He joined the firm’s Janssen Pharmacutica unit in 1988 as a sales representative and then worked in various positions in sales, marketing and management over the next 15 years. In 2001, Gorsky became president of Janssen and was promoted two years later to company group chairman of J&J’s pharmaceuticals business in Europe, the Middle East and Africa.

Gorsky left J&J in 2004 to become head of North American pharmaceuticals for Basel, Switzerland-based Novartis AG. He returned four years later, however, as company group chairman and worldwide franchise chairman for Ethicon in the medical devices business. In 2009, Gorsky was appointed worldwide chairman of the surgical care group and to J&J’s executive committee. He became vice chairman of the committee in January 2011. As CEO, he’ll be paid $1.2 million, according to a company filing.

DG Medical AddsQuality Engineer

DG Medical is expanding its team of quality experts. The Centerville, Ohio-based contract manufacturer has hired Michelle R. Schnell as quality engineer.

Schnell will oversee the company’s Quality System to confirm compliance with ISO 13485 standards and U.S. Food and Drug Administration regulations.

Schnell has more than seven years of experience in developing and executing quality systems in the medical device industry. Before joining DG Medical, she was a quality engineer at AtriCure Inc., a West Chester, Ohio-baseddeveloper and manufacturer of surgical ablation systems. She most recently worked as quality assurance and regulatory affairs director at Verium Diagnostics Inc., a medical diagnostic apparatus developer headquartered in Cincinnati, Ohio.

“We are pleased to have Michelle join our quality engineering team,” DG Medical President and CEO Mike Sieron said. “Her biomedical engineering background, coupled with her experience with the 510(k) process and regulatory compliance requirements will only enhance our ability to deliver the highest quality products and contract manufacturing services to DG Medical customers.”

Schnell received her B.S. degree inbiomedical engineering from the University of Cincinnati.

Injectronics Appoints New Director of Sales & Marketing

Jeremiah O’Connor Jr. has had quite adiversified career. He’s worked for sports equipment firms and a packaging provider, but his crowning achievement—thus far—most likely was the packaging and hydration system he invented for an online florist he co-founded (the invention is known in the floral industry as the “Moses Miracle”).

Now O’Connor is working his miracles in the medical device industry, having been named sales and marketing director atInjectronics Corporation, an injection molding, contract manufacturing and thermoformed packaging firm based in Clinton, Mass.

O’Connor has more than two decades of sales and marketing experience, having worked as vice president of sales for Rand-Whitney Container Corporation, a maker of corrugated packaging products, thermal technologies and related graphic services, according to his LinkedIn profile.

O’Connor also was in charge of sales, marketing and product development for Insignia Athletics, a ball glove and wooden bat manufacturer in Worcester, Mass. Inaddition, he was CEO of Nokona Factory, and co-founder/president of Kabloom. It was at Kabloom where O’Connor designed the Moses Miracle.

“We look forward to Jerry bringing his energy, ingenuity and skills to Injectronics and enabling us to grow with strategic medical partnerships,” Injectronics President and CEO Paul Nazaaro said.

O’Connor graduated from NorwichUniversity in Northfield, Vt., with a degree in business administration and marketing.