07.29.15
$4.5 Billion
KEY EXECUTIVES:
F. Michael Ball, CEO
John C. Stanley, Chairman of the Board
Richard J. Davies, Sr. VP and Chief Commercial Officer
David J. Endicot, President, Hospira Medical Devices
Thomas E. Werner, Sr. VP, Finance, and Chief Financial Officer
Zena G. Kaufman, Sr. VP, Quality
Sumant Ramachandra, M.D., Ph.D., Sr. VP & Chief Scientific Officer
Matthew R. Stober, Sr. VP, Operations
Marc Yoskowitz, J.D., Sr. VP, Strategy and Corporate Development
NO. OF EMPLOYEES: 19,000
GLOBAL HEADQUARTERS: Lake Forest, Ill.
Who is F. Michael Ball? The 57-year-old Canadian native has been CEO of Hospira since 2011. He joined the company following a bad profits year, and inherited a problematic facility in Rocky Mount, N.C. that had been served a warning letter from the U.S. Food and Drug Administration before he took his post. That first year with the company was rough. The problems in Rocky Mount forced him to replace most of the site’s leadership and hire two consulting firms to help fix the manufacturing quality issues, which led to a hit to the company’s overall financial and operational performance for the year. All told, about $487 million went into the Rocky Mount problem. Ultimately, it took until mid-2014 to resolve the issue, when a U.S. Food and Drug Administration (FDA) inspection led to no observations—but then, a Hospira site in India caught the agency’s ire, and Ball had to relive the nightmare over again.
And yet, Ball forged ahead with a smile on his face and determination to succeed. And one day in 2015, he saw the light—a $16 billion light, in fact, in the form of a coveted acquisition offer from pharmaceutical giant Pfizer Inc. In fact, Pfizer offered an almost unbelievable 40 percent more per share for Hospira’s stock than it was worth just a day before the deal was announced. The deal is expected to close in the second half of 2015.
So, who is F. Michael Ball? An optimist, for sure. He was hired for his famous “intense customer focus and exceptional results,” a reputation he made for himself during his 16 years at Irish pharmaceutical company Allergan plc. There, he helped drive top-tier financial performance over a 10-year period and earn the number 1 or number 2 market share position in most of the company’s marketed therapeutic categories. Ball’s been good for Hospira’s numbers. In 2014, he managed to boost the stock price from a low of nearly $41 on March 26, 2014, to a high (until Pfizer’s announcement) of about $67 a share on Jan. 26, 2015—a 63 percent hike.
“Given the job he’s done here, I would think he’d be very much in demand” to become the CEO of another company in need of a turnaround, said Kevin Kedra, an analyst at Gabelli.
The Hospira 2014 annual report was like a sigh of relief from a company that had had a difficult few years. “Over the past several years, we have transformed Hospira,” the report reads. And it’s true. The company pulled itself up out of its dark age and turned itself around last year.
Net sales for full-year 2014 (year ended Dec. 31) were $4.5 billion, an increase of 8.7 percent compared to full-year adjusted net sales of $4.1 billion in 2013, which exclude the impact of customer sales allowances associated with the company’s device strategy incurred in the first quarter of 2013. On a constant-currency basis, net sales increased 9.7 percent compared to full-year 2013 adjusted net sales. A strong U.S. SIP (systematic investment plan) and sales in the Other Phrama business, primarily driven by improved pricing and supply recovery, were the main contributor to the year-over-year increase. On a GAAP basis, net sales for full-year 2014 were $4.5 billion, an increase of 11.5 percent compared to GAAP full-year net sales in 2013, or 12.5 percent on a constant-currency basis. GAAP full-year net sales in 2013 include the impact of the customer sales allowances associated with the company’s Device Strategy.
“Hospira’s solid fourth-quarter results contributed to a year of excellent growth for the company,” said Ball when the end of year results were released. “Despite the entry of generic competition in the United States for our proprietary sedative Precedex, we delivered a very good year for Hospira. Our results speak to the significant progress we made—as well as the multiple milestones we achieved—in our key growth areas of generic injectables, biosimilars and devices.”
Initiated in 2013, Hospira’s Device Strategy was meant to establish a streamlined and modernized device portfolio to address customer needs and to position the company for future innovation and growth, all while supporting continued advancement of device remediation, including quality improvement efforts. The strategy built on the company’s comprehensive device review of its global installed base of more than 575,000 infusion pumps in 2013. In January 2015, Hospira was able to announce that the FDA lifted the import alert (yes, another problem Ball had to deal with) that previously prohibited U.S. importation of infusion pump devices manufactured in Hospira’s Costa Rica device manufacturing facility, including the Plum A+ and Lifecare PCA infusion pumps.
“In 2015, we expect that our continued efforts to streamline and modernize our portfolio will result in a number of key product launches, with Hospira ultimately providing the most advanced and intuitive pumps in the industry,” said President of Hospira Medical Devices David J. Endicott.
Endicott took on the newly created position of president of Medical Devices early in 2014. It was his responsibility to establish a fully integrated device organization – leading the commercial, research and development, manufacturing and related support functions to continue to advance the company’s product pipeline, execute its device strategy and ultimately drive global growth. Like Ball, he, too, joined Hospira from Allergan, bringing more than 25 years of industry experience with him to fuel the company’s invigorated mission to grow its medical device business.
Hospira Medical Devices didn’t see any regulatory device approvals in 2014—the fruits of the device strategy have been coming forth this year, with the FDA clearance of the Plum 360 infusion system in January. The system, which uses the Hospira MedNet safety software, is designed to help improve the safety and efficiency of intravenous medication administration.
The future of Hospira is in the hands of Pfizer now. As Crain’s Chicago Business noted in February, there was a time when CEOs would use “scorched earth tactics” to prevent buyouts that would make shareholders rich but would cost many, many jobs. Today, the promise of big paydays for outgoing executives in an acquisition, as well as the reality that most smaller fish (particularly in the pharmaceuticals industry, and to a lesser degree, medtech) are getting swallowed by the big players, makes acquisitions such as these unsurprising. Ball is predicted to walk away from the Pfizer deal with more than $80 million. We wish Hospira luck.
KEY EXECUTIVES:
F. Michael Ball, CEO
John C. Stanley, Chairman of the Board
Richard J. Davies, Sr. VP and Chief Commercial Officer
David J. Endicot, President, Hospira Medical Devices
Thomas E. Werner, Sr. VP, Finance, and Chief Financial Officer
Zena G. Kaufman, Sr. VP, Quality
Sumant Ramachandra, M.D., Ph.D., Sr. VP & Chief Scientific Officer
Matthew R. Stober, Sr. VP, Operations
Marc Yoskowitz, J.D., Sr. VP, Strategy and Corporate Development
NO. OF EMPLOYEES: 19,000
GLOBAL HEADQUARTERS: Lake Forest, Ill.
Who is F. Michael Ball? The 57-year-old Canadian native has been CEO of Hospira since 2011. He joined the company following a bad profits year, and inherited a problematic facility in Rocky Mount, N.C. that had been served a warning letter from the U.S. Food and Drug Administration before he took his post. That first year with the company was rough. The problems in Rocky Mount forced him to replace most of the site’s leadership and hire two consulting firms to help fix the manufacturing quality issues, which led to a hit to the company’s overall financial and operational performance for the year. All told, about $487 million went into the Rocky Mount problem. Ultimately, it took until mid-2014 to resolve the issue, when a U.S. Food and Drug Administration (FDA) inspection led to no observations—but then, a Hospira site in India caught the agency’s ire, and Ball had to relive the nightmare over again.
And yet, Ball forged ahead with a smile on his face and determination to succeed. And one day in 2015, he saw the light—a $16 billion light, in fact, in the form of a coveted acquisition offer from pharmaceutical giant Pfizer Inc. In fact, Pfizer offered an almost unbelievable 40 percent more per share for Hospira’s stock than it was worth just a day before the deal was announced. The deal is expected to close in the second half of 2015.
So, who is F. Michael Ball? An optimist, for sure. He was hired for his famous “intense customer focus and exceptional results,” a reputation he made for himself during his 16 years at Irish pharmaceutical company Allergan plc. There, he helped drive top-tier financial performance over a 10-year period and earn the number 1 or number 2 market share position in most of the company’s marketed therapeutic categories. Ball’s been good for Hospira’s numbers. In 2014, he managed to boost the stock price from a low of nearly $41 on March 26, 2014, to a high (until Pfizer’s announcement) of about $67 a share on Jan. 26, 2015—a 63 percent hike.
“Given the job he’s done here, I would think he’d be very much in demand” to become the CEO of another company in need of a turnaround, said Kevin Kedra, an analyst at Gabelli.
The Hospira 2014 annual report was like a sigh of relief from a company that had had a difficult few years. “Over the past several years, we have transformed Hospira,” the report reads. And it’s true. The company pulled itself up out of its dark age and turned itself around last year.
Net sales for full-year 2014 (year ended Dec. 31) were $4.5 billion, an increase of 8.7 percent compared to full-year adjusted net sales of $4.1 billion in 2013, which exclude the impact of customer sales allowances associated with the company’s device strategy incurred in the first quarter of 2013. On a constant-currency basis, net sales increased 9.7 percent compared to full-year 2013 adjusted net sales. A strong U.S. SIP (systematic investment plan) and sales in the Other Phrama business, primarily driven by improved pricing and supply recovery, were the main contributor to the year-over-year increase. On a GAAP basis, net sales for full-year 2014 were $4.5 billion, an increase of 11.5 percent compared to GAAP full-year net sales in 2013, or 12.5 percent on a constant-currency basis. GAAP full-year net sales in 2013 include the impact of the customer sales allowances associated with the company’s Device Strategy.
“Hospira’s solid fourth-quarter results contributed to a year of excellent growth for the company,” said Ball when the end of year results were released. “Despite the entry of generic competition in the United States for our proprietary sedative Precedex, we delivered a very good year for Hospira. Our results speak to the significant progress we made—as well as the multiple milestones we achieved—in our key growth areas of generic injectables, biosimilars and devices.”
Initiated in 2013, Hospira’s Device Strategy was meant to establish a streamlined and modernized device portfolio to address customer needs and to position the company for future innovation and growth, all while supporting continued advancement of device remediation, including quality improvement efforts. The strategy built on the company’s comprehensive device review of its global installed base of more than 575,000 infusion pumps in 2013. In January 2015, Hospira was able to announce that the FDA lifted the import alert (yes, another problem Ball had to deal with) that previously prohibited U.S. importation of infusion pump devices manufactured in Hospira’s Costa Rica device manufacturing facility, including the Plum A+ and Lifecare PCA infusion pumps.
“In 2015, we expect that our continued efforts to streamline and modernize our portfolio will result in a number of key product launches, with Hospira ultimately providing the most advanced and intuitive pumps in the industry,” said President of Hospira Medical Devices David J. Endicott.
Endicott took on the newly created position of president of Medical Devices early in 2014. It was his responsibility to establish a fully integrated device organization – leading the commercial, research and development, manufacturing and related support functions to continue to advance the company’s product pipeline, execute its device strategy and ultimately drive global growth. Like Ball, he, too, joined Hospira from Allergan, bringing more than 25 years of industry experience with him to fuel the company’s invigorated mission to grow its medical device business.
Hospira Medical Devices didn’t see any regulatory device approvals in 2014—the fruits of the device strategy have been coming forth this year, with the FDA clearance of the Plum 360 infusion system in January. The system, which uses the Hospira MedNet safety software, is designed to help improve the safety and efficiency of intravenous medication administration.
The future of Hospira is in the hands of Pfizer now. As Crain’s Chicago Business noted in February, there was a time when CEOs would use “scorched earth tactics” to prevent buyouts that would make shareholders rich but would cost many, many jobs. Today, the promise of big paydays for outgoing executives in an acquisition, as well as the reality that most smaller fish (particularly in the pharmaceuticals industry, and to a lesser degree, medtech) are getting swallowed by the big players, makes acquisitions such as these unsurprising. Ball is predicted to walk away from the Pfizer deal with more than $80 million. We wish Hospira luck.