Robert Palmisano moved into the corner office at Wright Medical Group Inc. (NSDQ:WMGI) last week, taking over the orthopedics maker amid its ongoing legal troubles.
Palmisano took over for interim president David Stevens, who has kept watch since former CEO Gary Henley resigned suddenly amid the company’s compliance issues.
Palmisano has spent years in publicly traded med-tech companies, most recently as president & CEO of ev3 Inc., a global endovascular device company which sold to Covidien plc (NYSE:COV) under his tenure for $2.6 billion in July of last year.
He held the top seat at several other life sciences companies, including IntraLase Corp., MacroChem Corp. and Summit Technology Inc. WMGI stock rose 6 percent on the news to $17.05 by mid-morning today.
As he joins the team, Wright Medical continues to be mired in legal issues surrounding charges that it ran a kickback scheme to drive up sales of its hip and knee implants. Last week the company agreed to extend a deferred prosecution agreement with federal prosecutors after the feds accused it of violating the original deal it struck to settle the kickback allegations.
In October 2010, Wright agreed to pay nearly $8 million to settle the charges, including a year-long probation of sorts, during which the AG agreed not to prosecute as long as Wright toed the line.
The feds charged the Arlington, Tenn.-based company with using consulting gigs for physicians to funnel alleged kickbacks to the docs – later, prosecutors accused the company of breaking the plea deal, after Wright revealed that an internal probe using outside counsel found "credible evidence of serious wrongdoing," according to regulatory filings.
In April, a surprise shakeup in Arlington saw the abrupt resignation – without severance – of former CEO Gary Henley and the outright firing of CTO Frank Bono, who was discharged "for failing to exhibit appropriate regard for the company’s ongoing compliance program." Three other senior executives resigned the next month.