RBC impact PositiveOctober 21, 2016 Concordia International Corp. Mark Thompson to Step down as CEO & Chair After Appointment of Successor
Impact: Positive
First impression Mark Thompson to step down as CEO: Concordia announced today that Mark Thompson will step down as CEO of the organization once a successor has been appointed. He will also leave the Board of Directors (where he currently serves as Chair) following the new appointment. The company indicated that the search process for a new CEO is underway.
A year filled with turmoil - we have seen the same change at other companies. After a very challenging year, we expect that a number of investors had been quietly calling for change at the company. While we had heard that a change was necessary from a number investors over the last several months, we were surprised the Board ultimately decided that this was the best path forward as we believed several BoD members were close to Mark Thompson. Having said this, many companies in the specialty pharma space that have experienced difficulties over the last year or so have seen similar changes that have helped improve investor outlooks. We expect that post a strategic review process that did not lead to any significant changes, a shake-up of senior management was likely viewed as a requirement. In the past when these changes have been made at other companies, the shares have generally traded higher.
Successor will require an international skillset. Given the geographical coverage of Concordia with more than 50% of revenues OUS, we expect that the replacement will likely require an international pharmaceutical skillset and will need to be well respected within the pharma and investment communities if possible. We expect that the future direction of the shares will be highly dependent on who takes on the role as CEO