J&J Veteran to Lead Boston Scientific
From Star Tribune (Minneapolis, MN) (September 14, 2011)
Sept. 14--Boston Scientific Corp. said Tuesday that it has chosen the head of Johnson & Johnson's medical device and diagnostics group as its next CEO.
Health care veteran Michael Mahoney will replace CEO Ray Elliott, who is stepping down next month after less than three years in the job. Mahoney initially will be president of Boston Scientific, which employs 5,000 in Minnesota, but is expected to become CEO on Nov. 12, 2012.
The company said the transition was set up to accommodate Mahoney's "post-employment obligations" to Johnson & Johnson. During that period, the interim CEO will be Boston Scientific executive Hank Kucheman, who is now president of the cardiology, rhythm and vascular group.
Analysts said they hope Mahoney can breathe new energy into the culture at Boston Scientific.
"I was pleasantly surprised by the hire," said Jan Wald, senior medical device analyst at Morgan, Keegan & Co. "I think getting someone of that caliber, I think it's significant for the company."
Mahoney, 46, has more than 22 years of health care experience and is currently worldwide chairman of Johnson & Johnson's medical device and diagnostics group. He was previously worldwide company group chairman of DePuy, a group of orthopedic and neuroscience businesses under Johnson & Johnson. Earlier in his career he worked at General Electric Medical Systems.
"He is intensely passionate about innovation and people, and creates and encourages a team environment that results in superior performance," Boston Scientific's co-founder and chairman, Pete Nicholas, said in a statement.
Boston Scientific said Elliott would be available until the end of the year to assist Mahoney and the interim CEO.
The announcement in May of Elliott's departure came as a surprise to investors. Elliott led a restructuring of Boston Scientific, which was dealing with debt from its $27 billion acquisition of Arden Hills-based Guidant Corp. and a decline in sales in key products such as heart defibrillators and stents. He initiated cost-saving plans that include cutting 1,400 positions worldwide in the next two years.
Wald said Mahoney faces a challenge in boosting the company's revenue. Boston Scientific's heart defibrillator and stent businesses have shown little growth. "He's got to find growth," Wald said.
Wald said he believes Mahoney's Johnson & Johnson experience will help Boston Scientific. Johnson & Johnson has a culture of training physicians to help develop or expand a market, Wald said.
A Boston Scientific spokesman said Mahoney was not available for interviews on Tuesday because he is not an employee yet.
Boston Scientific's stock closed on Tuesday at $6.26, up 4 cents. The announcement was made after the market closed.
Wendy Lee --612-673-1712
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Posted: September 2011