Cardinal taps Teva exec to lead troubled supply business
Cardinal Health Inc. has hired the head of a generic drug maker to lead the Dublin, Ohio-based distributor's troubled operation that supplies pharmaceuticals and surgical and medical tools to hospitals and pharmacies, the company said Thursday.
George Barrett starts at the end of January as CEO of Cardinal's Healthcare Supply Chain Services, which encompasses pharmaceutical and supply businesses. He replaces Mark Parrish, who left in November after a year in the job.
Cardinal Health is the parent company of St. Louis-based pharmacy franchisor Medicine Shoppe International Inc.
The underperforming operation is Cardinal's largest and best-known business, responsible for 94 percent of its revenue and 70 percent of its profit. Cardinal Health reported $1.9 billion in profit on $86.9 billion in revenue for the year ended June 30.
Barrett, 52, had been CEO of Teva North America, a branch of Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) of Israel. He'd been with Teva since 1999, CEO of North American operations since 2005 and executive vice president of its global pharmaceuticals markets for the past year.
"His strategic leadership, deep operational experience and outstanding global knowledge of the pharmaceutical industry will help us on our path to becoming the premier global health care company," Cardinal CEO R. Kerry Clark said in a release.
Cardinal (NYSE: CAH) also Thursday named David Schlotterbeck, 60, head of its Clinical and Medical Products business, as vice chairman. The business, representing 6 percent of revenue and 30 percent of profit, makes hospital equipment for intravenous infusion, automated drug dispensing, respiratory care and infection prevention.
Barrett faces an immediate challenge in turning around Healthcare Supply Chain Services.
Clinical and Medical Products is beating performance targets and expected to keep overall revenue and earnings on target for Cardinal, but Clark told investors in a November conference call that the supply sector was expected to miss its goal of increasing segment profit by 7 percent to 10 percent for 2008.
"Our top-line growth and operating margins are not meeting our expectations because we have not been executing as well as we should be," Clark said, according to a transcript. "We had some business losses last year that we had expected to offset this year but did not. This has depressed our core direct-store growth. We did not get the planned levels of generic penetration, which is impacting generic sales growth. And we have not adjusted our costs as quickly as we should have."
For the second quarter, to be reported Jan. 29, Cardinal expects segment profit to be 10 percent to 20 percent below the same period in 2007, said Jeffrey Henderson, chief financial officer and since November the interim supply chief. The company also has to renegotiate its contract this summer with Walgreen Co. (NYSE: WAG), a major retail customer.
But the company expects its profit to rise significantly in the second half of the year, driven largely by launches of new generic drugs, including one used in cardiac imaging tests. Also, Cardinal has been addressing customer service issues in the medical supply business by consolidating operations in Dublin from a former site in Waukegan, Ill.
At an investors conference Tuesday, Henderson said of the segment: "From a strategic and market positioning standpoint, I feel very good about where we are."
Barrett for two years also headed technology start-up Diad Research, based at Johns Hopkins University medical school in Baltimore, and from 1990 to 1997 held management jobs at Alpharma Inc. (NYSE: ALO) and NMC Laboratories Inc.
Source : www.bizjournals.com
George Barrett starts at the end of January as CEO of Cardinal's Healthcare Supply Chain Services, which encompasses pharmaceutical and supply businesses. He replaces Mark Parrish, who left in November after a year in the job.
Cardinal Health is the parent company of St. Louis-based pharmacy franchisor Medicine Shoppe International Inc.
The underperforming operation is Cardinal's largest and best-known business, responsible for 94 percent of its revenue and 70 percent of its profit. Cardinal Health reported $1.9 billion in profit on $86.9 billion in revenue for the year ended June 30.
Barrett, 52, had been CEO of Teva North America, a branch of Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) of Israel. He'd been with Teva since 1999, CEO of North American operations since 2005 and executive vice president of its global pharmaceuticals markets for the past year.
"His strategic leadership, deep operational experience and outstanding global knowledge of the pharmaceutical industry will help us on our path to becoming the premier global health care company," Cardinal CEO R. Kerry Clark said in a release.
Cardinal (NYSE: CAH) also Thursday named David Schlotterbeck, 60, head of its Clinical and Medical Products business, as vice chairman. The business, representing 6 percent of revenue and 30 percent of profit, makes hospital equipment for intravenous infusion, automated drug dispensing, respiratory care and infection prevention.
Barrett faces an immediate challenge in turning around Healthcare Supply Chain Services.
Clinical and Medical Products is beating performance targets and expected to keep overall revenue and earnings on target for Cardinal, but Clark told investors in a November conference call that the supply sector was expected to miss its goal of increasing segment profit by 7 percent to 10 percent for 2008.
"Our top-line growth and operating margins are not meeting our expectations because we have not been executing as well as we should be," Clark said, according to a transcript. "We had some business losses last year that we had expected to offset this year but did not. This has depressed our core direct-store growth. We did not get the planned levels of generic penetration, which is impacting generic sales growth. And we have not adjusted our costs as quickly as we should have."
For the second quarter, to be reported Jan. 29, Cardinal expects segment profit to be 10 percent to 20 percent below the same period in 2007, said Jeffrey Henderson, chief financial officer and since November the interim supply chief. The company also has to renegotiate its contract this summer with Walgreen Co. (NYSE: WAG), a major retail customer.
But the company expects its profit to rise significantly in the second half of the year, driven largely by launches of new generic drugs, including one used in cardiac imaging tests. Also, Cardinal has been addressing customer service issues in the medical supply business by consolidating operations in Dublin from a former site in Waukegan, Ill.
At an investors conference Tuesday, Henderson said of the segment: "From a strategic and market positioning standpoint, I feel very good about where we are."
Barrett for two years also headed technology start-up Diad Research, based at Johns Hopkins University medical school in Baltimore, and from 1990 to 1997 held management jobs at Alpharma Inc. (NYSE: ALO) and NMC Laboratories Inc.
Source : www.bizjournals.com
Posts
Post a Comment