CEO of Slumping Allergan Says He Will Retire
William C. Shepherd, Allergan Inc.’s chairman and chief executive, is retiring after 30 years with the company and turning its operations over to a new recruit from pharmaceutical mega-giant Norvatis, the Irvine drug maker said Friday.
David Pyott, 43, head of Novartis’ nutrition division in Basel, Switzerland, will succeed Shepherd as chief executive effective Jan. 1. Dr. Herbert W. Boyer, 61, an Allergan board member and founder of successful Genentech Inc., will become chairman.
Shepherd, 59, said he launched the search for a top executive to replace him last January after deciding he wanted to spend more time with his three young grandchildren.
The Newport Beach resident acknowledged, however, that he has been disappointed with Allergan’s performance during his last two years.
“I’m not satisfied. The management team isn’t satisfied. And the board isn’t satisfied,” Shepherd said in an interview.
The company has taken its knocks during a painful consolidation last year, 450 job cuts, product recalls and disappointing earnings results.
But Shepherd said he believes the rough times are gone. He cited recent federal approval for drugs made by the company, including Tazorac, a treatment for psoriasis and acne. He also praised his successor.
“David is a proven leader and has an exceptional track record in managing health-care businesses,” Shepherd said.
The company announced the executive changes after the stock market closed Friday. Shares closed at $36.06, up 18 cents, in moderate trading on the New York Stock Exchange.
Pyott, a member of Novartis’ elite executive committee, runs a part of the company that is more than double the size of Allergan. Novartis--the result of a $36-billion merger last year of Swiss companies Sandoz Ltd. and Ciba-Geigy Ltd.--is the world’s largest drug company.
Pyott runs the nutritional division, which produces the Gerber baby food line. The division has annual sales of $3 billion and 15,000 employees, said Allergan spokesman Jeff D’Eliscu. Allergan, in contrast, employs about 6,000 and is expected to post sales of about $1.2 billion this year.
Pyott, a British citizen, holds a master of arts degree from Edinburgh University, an MBA from the London Business School and a law diploma from the University of Amsterdam.
He joined Sandoz in 1980, working in operational planning and international product management. He later became marketing manager in Malaysia and Singapore and general manager in Austria and then Spain. Pyott was president and chief executive of Sandoz’s domestic nutrition division before becoming head of its nutrition sector in 1995. He is married and has four children.
Shepherd started with Allergan in its research department in 1966. He became president in 1984, chief executive in 1992 and chairman in January 1996. He noted that Allergan has struggled in its strategic push from a maker of contact lenses and other eye-care products to an enterprise that is moving into other cutting-edge pharmaceutical markets.
He said he expects to volunteer as a consultant to the company after he retires in January.
