Carolyn Logan, chief executive officer of Salix Pharmaceuticals (Nasdaq” SLXP), is retiring as of Jan. 30 in the wake of an inventory snafu that cost the Raleigh-based company some $3 billion in stock value in just a few hours and likely scuttled a merger worth as much as $10 billion.
Salix (Nasdaq: SLXP) announced Logan’s departure Monday.
Earlier, the chief financial officer of Salix also resigned.
Logan will remain a consultant with the company, Salix said in a statement. She has served as CEO for more than 12 years and led the company to record-hire share value last fall before the inventory woes surfaced.
“What Carolyn has accomplished in the 12-1/2 years she has led our Company is remarkable,” said Tom D’Alonzo, chairman of Salix’s Board of Directors, in a statement.
“The Board extends Carolyn its deepest gratitude for taking Salix from an early-stage commercial company with a market capitalization of approximately $200 million, one product and less than $25 million in annual revenues, to a leading gastroenterology-focused specialty pharmaceutical company with a multi-billion dollar market capitalization, more than 20 products and over $1.0 billion in annual revenues. We will miss Carolyn’s leadership and enthusiasm, and wish her the best of luck as she enters this next exciting chapter.”
D’Alonzo will serve as interim CEO until a new chief executive is found.
Salix General Council William Bertrand will act as chief operating officer.
“It has been an honor and a privilege to have worked with so many talented people at Salix for more than a decade,” Logan said in a statement.
“I am extremely proud of what this extraordinary group has accomplished for our shareholders, physicians and patients.”
Salix shares have rebounded over the past few weeks after the company said it would launch a plan to reduce drug inventory by the end of 2015.
Salix was rocked in November when it acknowledged big inventory problems.Shares dropped some 40 percent.
The company said it would reduce sales to wholesalers as part of its strategy.
“By accelerating the reduction of our inventory to targeted levels, we can more quickly focus on the underlying strength of our business and return sales growth to demand-based levels,” Logan said at the time. “As part of this effort, we are working with our wholesale partners to more aggressively work down their inventories. While this effort will impact Salix’s revenue in the fourth quarter of 2014 and the full year 2015, we believe this one-time reduction over a defined period of five quarters is the right decision for the business long-term.”
Salix is reducing sales to wholesalers even as demand for its top four gastrointestinal products have increased year-over-year.
- Prescription demand for Xifaxan 550 is up 24 percent
- Demand for Apriso is up 12 percent
- Relistor is up 31 percent
- Uceris is up 64 percent
“With our continued strong prescription growth, attractive pipeline of new products and our second-to-none sales force, Salix continues to be a market leader in gastroenterology,” Logan said in a statement. “The Board and management have determined that the decision to accelerate the reduction of wholesale inventory levels, which reflects the views expressed by our largest shareholders, best positions Salix for future success.”
However, Salix also disclosed that the Food and Drug Administration had delayed possible approval of Xifaxan 550 for the treatment of irritable bowel syndrome with diarrhea until May of next year.
