SIGMA PHARMACEUTICALS has tempted its former chief financial officer to return to the business as its boss, despite the chances of the role being scrapped by a takeover by South Africa's Aspen Pharmacare.
Mark Hooper, who is the CFO of PaperlinX, has been appointed the new chief executive of the struggling drugs marketer and distributor, and is expected to start his new job in September. Mr Hooper was the CFO at the pathology and medical centres business Symbion Health from 2006 to 2008 and was the CFO at Sigma for five years before that.
He rejoins Sigma at a volatile time for the company, after it unveiled $500 million in asset write-downs and a $390 million full-year loss.
Sigma's long-serving CEO, Elmo de Alwis, resigned in April after the losses were announced. Its CFO, Mark Smith, followed Mr de Alwis out the door soon afterwards. Its chairman, John Stocker, and executive director, Doug Curlewis, unexpectedly announced their early retirement.
Sigma's stumble, along with its falling share price, attracted a takeover proposal from Aspen, Africa's biggest drug company, which has offered 60? a share for the company, valuing it at $707 million.
Aspen has been invited by the Sigma board to begin due diligence and if a takeover bid is launched - and successfully completed - it could make Mr Hooper's tenure one of the shortest in recent years.
Despite this danger, Mr Stocker told BusinessDay that Mr Hooper was "enthusiastic about taking on the role".
Shares in Sigma closed up 1.5?,or 3.1 per cent, at 49.5? on news of the appointment yesterday.
The UBS healthcare analyst Andrew Goodsall said Mr Hooper was very well regarded in the pharmacy industry and from a corporate perspective, was seen as somewhat of a turnaround specialist.
"Of particular note is the role Mr Hooper played in cleaning up Sigma trading terms during the period 2001-04 and the relatively complicated refinance of PaperLinx recently," Mr Goodsall said. He said Mr Hooper's appointment provided Sigma with options and that with new leadership, the company could more effectively seek refinance to continue trading as a stand-alone company, creating price tension in the existing offer from Aspen.
"We consider either outcome superior to the uncertainty of the last 10 weeks," Mr Goodsall said.
"In the immediate short term, new leadership will likely limit market share losses from customers who may have been concerned about the future of Sigma."
Sigma could still face short-term volatility with refinancing, trading terms and asset sales.
A "clearing of the decks" at the company, including more write-downs or profit downgrades from the incoming chief executive, were also possible.
Frequently Asked Questions about this Article…
Who is Sigma Pharmaceuticals' new CEO and when will Mark Hooper start?
Sigma has appointed Mark Hooper as its new chief executive. Hooper, who previously served as Sigma's CFO and is currently CFO of PaperlinX, is expected to begin the role in September.
Why is the new Sigma CEO role under threat from Aspen Pharmacare?
South Africa's Aspen Pharmacare has submitted a takeover proposal for Sigma and the Sigma board has invited Aspen to begin due diligence. If Aspen launches and completes a takeover bid, the CEO role at Sigma could be scrapped or shortened, putting Mark Hooper's tenure at risk.
What financial problems did Sigma disclose that prompted leadership changes?
Sigma revealed $500 million in asset write-downs and a $390 million full‑year loss. Those results preceded the resignation of long‑serving CEO Elmo de Alwis and were followed by other senior departures, contributing to the company's current volatility.
How did the market react to Mark Hooper's appointment as Sigma CEO?
On the news of Hooper's appointment, Sigma shares rose—closing up about 1.5% (reported as 3.1% in another figure) on the day—indicating a positive short‑term market response to the leadership change.
What do industry observers say about Mark Hooper's ability to turn Sigma around?
UBS healthcare analyst Andrew Goodsall described Hooper as well regarded in the pharmacy industry and something of a turnaround specialist. Goodsall noted Hooper's role in cleaning up Sigma trading terms in the past and his recent work on PaperlinX refinancing, suggesting his appointment gives Sigma options to pursue a refinancing or other fixes.
How could Hooper's appointment affect Aspen's takeover offer and Sigma's strategic options?
Hooper's arrival could strengthen Sigma's ability to seek refinancing and continue as a stand‑alone company, creating price tension around Aspen's existing offer that values Sigma at about $707 million. Alternatively, the Aspen bid could still proceed—Hooper's appointment simply gives Sigma more strategic options.
What short‑term risks should everyday investors expect with Sigma now?
Investors should expect continued short‑term volatility as Sigma deals with refinancing, trading terms, potential asset sales and the possibility of further write‑downs or profit downgrades. The outcome of Aspen's due diligence and any takeover action will also be a major near‑term risk driver.
What should shareholders and everyday investors watch next for updates on Sigma?
Watch for announcements about Aspen's due diligence and any formal takeover bid, Sigma refinancing efforts, updates on trading terms or asset sales, and any further profit guidance or write‑downs from the new leadership. These items will be key to assessing Sigma's outlook and share price direction.
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