San Diego-based CareFusion (NYSE: CFN) has tapped Kieran Gallahue as chairman and CEO. He will succeed David Schlotterbeck, who previously announced plans to retire later this month. Schlotterbeck orchestrated CareFusion's spinoff from Cardinal Health in 2009, as Reuters notes.
Shares of CareFusion jumped 3.5 percent to $26.63 in morning trading. ResMed shares fell three percent to $30.55, according to Reuters.
Gallahue had been serving as president and CEO of ResMed (NYSE: RMD), which develops, manufactures and markets products for the treatment and management of respiratory disorders, with a focus on sleep-disordered breathing. The ResMed board has appointed company founder and executive chairman Peter Farrell to serve as interim president and CEO. Gallahue will not receive any severance benefits in connection with his departure, ResMed says a statement. However, according to his agreement with CareFusion, he will receive an base salary of $1.15 million over an initial three-year term, as well as a one-time sign-on cash bonus of $650,000.
"Kieran's resignation came as a surprise but we wish him well," Farrell says in a release. "As executive chairman, I remained closely involved with ResMed's strategy, so stepping back into the CEO role will not be a novelty for me and will ensure continuity for the team. The market for sleep-disordered breathing continues to bring forward enormous opportunities, and I am as excited as I have ever been about ResMed's future."
Gallahue has nearly 20 years of strategic, operational and corporate management experience in the healthcare industry, CareFusion notes. Since 2007, he has also served on the board of Volcano Corp., a developer of products for interventional cardiology. And analysts have been positive about his hiring. "Given Mr. Gallahue's experience leading ResMed, a best in class mid-cap medtech firm, we believe this is a quality hire," Susquehanna analyst David Turkaly said in a note, as quoted by Reuters.
For fiscal 2010, CareFusion saw revenue of $3.9 billion. The company is slated to announce its Q2 fiscal 2011 results Feb. 3 at 5 pm EST. ResMed already has announced its results for the quarter that ended Dec. 31, 2010. According to a statement, revenue for the quarter was $306 million, an 11 percent increase over the quarter that ended Dec. 31, 2009.
- read the CareFusion release
- check out the ResMed release
- see more from Reuters