The pharmaceutical industry may be under public and federal scrutiny for the exorbitant prices of some drugs. But that didn't deter Lake Forest, Ill.-based Horizon Pharma from paying CEO Timothy Walbert $93.4 million last year, with more than $90 million of it coming in stock and stock option awards.
His combined pay package came to more than twice what the highest-paid drug industry executive made in 2014.
According to Horizon's preliminary proxy statement filed Tuesday with the Security and Exchange Commission, Walbert, who also chairs the company's board, received stock options valued at $47.4 million and $43.5 million in restricted shares. Walbert's options and one-quarter of the shares will vest over a four-year period, and the remaining stock will vest in 2018 if Horizon performance targets are met, according to the filing.
Horizon amended its 2014 plan so stock recipients would be given an opportunity to benefit from increases in the value of ordinary shares, according to the proxy statement. Walbert received $8.97 million in total compensation in 2014.
Horizon, domiciled in Ireland, now markets nine Food and Drug Administration-approved drugs for orphan diseases, arthritis, pain and inflammatory diseases. The company's acquisition strategy generated earnings of $39.5 million on $757 million in sales in 2015 compared to a loss of $263.6 million on $297 million in sales the previous year.
Walbert's base salary was $859,375 last year, a 24.6% increase from 2014. He also received a $1.5 million bonus in 2015.
Pharma executives consistently rank among the highest paid officials in healthcare. Dr. Leonard Schleifer, president and CEO of Regeneron Pharmaceuticals, landed atop Modern Healthcare's most recent list of 50 top-paid execs at publicly traded healthcare industry companies. Schleifer received almost $42 million in total compensation in 2014.
Horizon, like other pharmaceutical companies, is under the watchful eye of the federal government. The company revealed in its annual 10-K report, released last month, that it received a subpoena from the U.S. attorney's office in New York City, which requested documents and information related to its patient-assistance programs and other aspects of Horizon's marketing and commercialization activities. Horizon said it may incur significant costs in connection with the investigation.
In its annual 10-K report, the company also said it is being sued by Express Scripts, which is seeking damages of $139.9 million for alleged unpaid rebates and administrative fees. Horizon said the claims are without merit.
Horizon shares closed sharply lower Tuesday, down $2.49, or 13.7%, to $15.74 a share. It was trending slightly higher in after-hours trading.
In other sector news, Canadian drugmaker Valeant Pharmaceuticals reported lower earnings on Tuesday, according to the Associated Press. The company fell short of profit expectations in the fourth quarter and slashed its guidance for the current quarter and the full year, citing lower sales across many of its businesses.
Valeant shares lost more than half their value Tuesday to close at $33.51 a share.