Mylan's (MYL) combination with the world's largest drug maker, folding into Pfizer's (PFE) Upjohn business, is not only a big shakeup for the business, but for management.
Bresch Bows Out
As part of the deal, current Mylan CEO Heather Bresch will be departing her role and will be replaced by Pfizer's Michael Goettler, the current head of Upjohn.
A company biography details an extraordinary rise to power for Bresch, who began her career at Mylan as a data entry clerk in 1992. After 20 years climbing the ladder, she rose to become CEO, the first female to head a global pharma company of its size.
"During her almost three-decade tenure at Mylan, Heather has been instrumental in transforming the company from a 300 employee, $100 million revenue, single-country operation into a global organization that, upon close of the Mylan and Upjohn transaction, will have more than 45,000 employees, nearly $20 billion in revenue and a reach across more than 165 countries, including a new leading position in China," board chair Robert Coury said. "On behalf of Mylan's Board, I extend tremendous thanks and credit to Heather Bresch for her many years of service to Mylan and for her authentic leadership style that helped to ensure Mylan's mission of access could live on for years to come."
Still, many analysts on Wall Street and Capitol Hill are likely happy to see her go, as her tenacious defense of drug prices, particularly the EpiPen, has been a sore spot for the stock and the company's public image in recent years.
Additionally, her substantial salary hikes have caught the ire of many progressive politicians looking to police soaring prices.
"This hearing is critical because yet another drug company, Mylan, has jacked up the price of a lifesaving product for no discernible reason... I did read your testimony, Ms. Bresch, and I was not impressed," Rep. Elijah Cummings (D-MD) said in a hearing in 2016. "The reason being, I believe, is to get filthy rich at the expense of our constituents."
The excoriation at the hands of Cummings continued through a number of hearings, some of which Bresch began to skip.
Congress made clear its displeasure with Bresch's continued pay hikes, bringing her compensation to near the top of her industry from a previously quite low level.
With a parting shot, Bresch will carry a handsome payout into retirement.
$MYL CEO Heather Bresch may be leaving post-combo w $PFE Upjohn, but not empty-handed. Per Wells Fargo's @davidmaris note: "According to Mylan's proxy filed May 24, 2019, in a change in control, Mylan's CEO would receive approximately $37.6 million."— Meg Tirrell (@megtirrell) July 29, 2019
CFO Ken Parks will also be departing the company after a considerably shorter tenure, beginning in 2016.
Goettler's Got the Job
With the new company again being U.S. domiciled, a new European CEO will come in to head the unit in place of Bresch.
Michael Goettler, the new man atop the combined totem pole, brings experience as Group President of Pfizer's Upjohn business prior to the deal, with previous experience as Global President of Rare Diseases for Pfizer's Global Innovative Pharma Business.
Goettler moved to his current role from Wyeth Pharmaceutical, which was acquired by Pfizer in 2009. Following the deal, he was appointed president of the company's Asia-Pacific region for Specialty Care subsequently, bounced from executive titles including Global Commercial Officer and regional president of Europe for Specialty Care.
His global focus is of particular interest to analysts and investors who are eager for Mylan's gaze to turn away from its domestic shores.
"I'm honored by the opportunity to lead this new company, which will deliver more medicines to more patients across the globe. I'm also excited to combine two talented and deeply experienced teams that share a passion for providing patients with access to medicines," Goettler said upon his appointment. "I look forward to delivering on that shared commitment by combining Mylan's broad and diverse portfolio with Upjohn's iconic, trusted brands and bringing the Mylan growth products to the Upjohn growth markets."
The focus on growth markets could accelerate upside from the deal, according to bullish analysts.
"[Mylan] could benefit from operating synergy and OUS diversification, as well as a management overhaul," Leerink Partners analyst Ami Fadia said. "Michael Goettler as the new CEO [will] probably take a fresh look at Mylan's pipeline and clarify the strategic focus for the combined company."
Malik Not Moving
In one interesting nugget, the new company will maintain the president's role of Rajiv Malik, who is also a board member at the company.
"I am also pleased that Rajiv Malik will continue to serve in the role of president," Coury said. "Rajiv has been and continues to be instrumental in the building and execution of our true one-of-a-kind and very complex platform, and he will serve as a strong complementary partner to Michael [Goettler]."
Malik's sustained role is particularly interesting given the hostile headlines that have been aimed at him as of late, much the same as Bresch's battering.
Malik, who faces massive civil suits for alleged drug price fixing, had been supposed to be another exit from the new firm, but instead will stay on.
It will be interesting to observe how his role evolves as the deal comes close to close and all the shakeups shake out.