REFILE-UPDATE 1-Forest Labs' longtime CEO Solomon to step down at year-end

Thu May 23, 2013 11:39am EDT

May 23 (Reuters) - Forest Laboratories Inc said Howard Solomon, its chief executive of more than 35 years, will retire at the end of this year, capping a tenure that saw the company morph from a small generic and vitamins maker to a $10 billion corporation.

Solomon will continue in the chairman role until the annual shareholder meeting in 2014, the company said.

Forest Labs, which was in a bitter proxy battle with activist investor Carl Icahn last year, said it has been evaluating internal and external candidates for the top job.

The company adopted a shareholder rights plan last August year after Icahn built up a more than 10 percent stake in the company and won one of four board seats that he sought at the company.

Icahn has criticized the company for being ill-prepared to generate new growth as generic competition curtails revenue from two of its biggest-selling treatments - Lexapro for depression and Namenda for Alzheimer's disease.

He also accused the company of hiding information from shareholders that could show it was trying to deter potential acquirers and expressed concerns about the company receiving warning letters from the U.S. Food and Drug Administration about unethical practices by its sales representatives.

Icahn was not immediately available for comment when Reuters tried to contact him on Thursday.

"While Howard Solomon has built an unquestionably successful company, we believe disclosure of succession plans will be viewed favorably by investors and expect Forest shares to react positively to the news," J.P. Morgan analyst Chris Schott said in a note.

Solomon will stand for re-election to the board of directors at its 2014 shareholder meeting and become chairman emeritus.

The company's shares rose 2 percent to $38.30 in morning trade on the New York Stock Exchange. They touched a high of $38.98 earlier in the session.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

How to get out of debt

Financial adviser Eric Brotman offers strategies for cutting debt from student loans and elder care -- and how to avoid money woes in the first place.  Video