Jack W. Cumming, 68, who had been a part of the top management team of Hologic Inc, Bedford, Mass., for over a decade will be replaced as president and CEO by Stryker veteran Stephen MacMillan. In addition, the company announced that as part of a settlement with activist investor Carl Ichan, it will add two Ichan Capital managing directors to its board and bring radiologist Burton Drayer, MD, in as a scientific advisor.
Hologic faced a serious takeover threat after the company’s stock tumbled upon news of poor fourth quarter financials and Ichan revealed that together with his affiliates, he owned approximately 34.2 million shares of Hologic common stock. This is roughly 12.5% of all Hologic's outstanding shares.
The two new board member, Jonathan Christodoro and Samuel Merksamer, will join the board immediately, Hologic announced in a press release. Their addition brings the total number of board members to 11.
Ichan tweeted to his followers that he was “optimistic” regarding the changes at Hologic and also happy to see Drayer come on board as the company’s scientific advisor. Drayer has served as chairman and director of the Department of Radiology at The Mount Sinai Medical Center since 1995. He is well known having published extensively (200 articles, 41 book chapters and two books) and served in leadership for both the American College of Radiology (Board of Chancellors member) and the Research & Education Foundation at the Radiological Society of North America (RSNA, Board of Trustees member as well as president in 2011).
"Given his experience and deep knowledge in medical diagnostics and radiology, I believe that Dr. Drayer will be an extremely valuable resource to the Company going forward," Ichan stated in the press release.
For MacMillan, the new president and CEO, a top duty will almost certainly be to improve results for investors. At Stryker Corporation, where he served in leadership for nearly a decade, MacMillan oversaw successful acquisitions and products launches that nearly tripled the company's revenue during his tenure. The company grew from $2.8 billion to $8.3 billion between the years 2003 and 2011. It's stock price appreciated more than 62%, compared to appreciation of the S &P 500 index of approximately 40%, according to the press release.
According to Hologic's financials, its products (and particularly its breast imaging segment) perform well considering the uncertainty of health care reform and government payment policies. However, some investors contend that the company's leadership mismanaged acquisitions and costs related to these business decisions have led the company to under perform for its stock holders.