Quest snags Philips Healthcare head as new CEO
Quest Diagnostics ($DGX) has scored a big name to succeed Surya Mohapatra as president and CEO. Stephen Rusckowski (pictured), who has served as CEO of Philips Healthcare since 2006, will join Quest, taking over Mohapatra's duties as of May 1.
Not to be outdone, Philips also announced its new healthcare head: Deborah DiSanzo, who has worked at Philips for more than a decade.
Some analysts expressed reservations over Rusckowski's sudden departure. Sjoerd Ummels, an analyst at ING in Brussels, called it "a setback," as Rusckowski was "instrumental in building out Philips' healthcare business, the key earnings contributor," according to Bloomberg.
But Rusckowski seems to be already looking ahead and has been quick to praise his new employer, calling it "dynamic" and "innovative." Furthermore, "given the company's strong position in diagnostic testing, information and services, I believe there are extraordinary opportunities to grow and build shareholder value," he added in a statement.
The announcement comes several months after Quest said it was scouting for a new CEO. It also comes as laboratory service providers continue to face pressure from managed care companies to reduce testing costs and uncertainty surrounding healthcare reform.
Some investors might welcome the change at the top of Quest, which made some head-scratching decisions under Mohapatra, as Dow Jones notes. The news service points to the acquisition of diagnostics company AmeriPath and its expansion into India as examples of moves critics questioned.
Given this background, the CEO announcement has been hotly watched. "We knew this was going to get announced any day," said Jefferies & Co. analyst Art Henderson. "The investment community wasn't sure who the candidate would be. Who they have chosen is obviously somebody who was pretty instrumental in the growth at Philips."
And Henderson is right about Rusckowski's track record. Philips Healthcare saw its revenues increase from about €6 billion ($7.9 billion) in 2005 to about €9 billion ($11.8 billion) last year.
Meanwhile, DiSanzo, who, as Martin Prozesky of Sanford C. Bernstein notes, has done well helming the Philips monitoring systems and clinical diagnostics business, will face new challenges. These challenges include stiff competition from General Electric ($GE) and Siemens AG ($SI) in selling health equipment, as well as declining demand as hospitals cut back on orders.
Photo courtesy of PRNewsFoto/Quest Diagnostics.
ALSO: The FDA yesterday gave its blessing to Quest Diagnostics' Simplexa C. difficile universal direct test on the 3M Integrated Cycler. The test is designed to help diagnose Clostridium difficile-associated disease, one of the most common and dangerous acquired infections in healthcare settings. Quest release
Quest begins search for CEO