Another Medtech CEO Gets the Boot

Avita Medical has abruptly replaced its CEO, but is the new guy really up to the task?

Amanda Pedersen

September 30, 2022

4 Min Read
Image showing a business man flicking the "CEO block" off a pyramid of blocks
Image courtesy of Cagkan Sayin / Alamy Stock Photo

Usually when a company's board pulls the trigger on a CEO replacement, the goal is to find a leader with a strong track record of turning things around. But perhaps being on both sides of the table will prove to be an advantage for James "Jim" Corbett, who will now lead Avita Medical as CEO.

Corbett, who already served on Avita's board, replaces Michael Perry, effective immediately. The transition comes at a time when Avita's shares are at their lowest level in years. Perry had served as Avita's CEO since June 2017.

The Cambridge, UK-based company touts Corbett's nearly 40 years of experience in the life sciences field, and that he has served as CEO of multiple publicly traded companies, including Microtherapeutics, Ev3, and Alphatec Spine. He also served as CEO at Home Diagnostics, Vertos Medical, and CathWorks.

It should be noted, however, that his abrupt 2008 departure from Ev3 came at a low point in that company's history. Ev3, which made a variety of devices for vascular diseases, had been considered a promising young company until it ran into integration problems after merging with another rising company, FoxHollow Technologies. Covidien eventually acquired Ev3 in 2010, which later bit Medtronic in the rear, years after its historic acquisition of Covidien. In late 2018, Medtronic paid a hefty $50.9 million to resolve claims for activities that Ev3 allegedly conducted between 2005 and 2009 involving the Onyx Liquid Embolic System.

Avita's chairman, Lou Panaccio, certainly seems impressed with Corbett's track record, however.

“Jim is an experienced strategist with significant commercial expertise that positions him well to lead Avita Medical through its next stage of growth and beyond,” Panaccio said in a company statement. “Having run a thorough process utilizing a leading executive search firm, I am confident that Jim is the right leader for the company at this time."

Ryan Zimmerman, a medtech analyst at BTIG, admitted in a report earlier this week that the CEO change at Avita caught him off guard at first, as investors had no warning that this change was coming. A conversation with Corbett provided the analyst with more clarity on the board's thinking, however.

"Regardless of where shares are trading today (albeit inexpensive, in our view), Mr. Perry was a clinically-oriented leader who successfully took [Avita] through a number of trials and indication expansions," Zimmerman wrote. "As [Avita] enters a new commercial phase, with the data from both the Soft Tissue trial and Vitiligo trial complete (and successful), [Avita] is focused on adopting a more commercially oriented strategy to drive revenue growth and requires leadership with more experience commercializing medical devices in larger markets. Admittedly, while the change caught us off guard initially, we don't disagree with this assessment and think that this may be the necessary medicine to get shares in a stronger position longer-term."

The year of the medtech CEO turnover

It has indeed been the year of the medtech CEO turnover.

The medtech industry has seen a number of CEO changes in 2022, some of which have been voluntary, some of which have not.

A month ago, Invacare gave its top executive the old heave-ho. The company did keep Matthew Monaghan on as a board director, but he is no longer the company's CEO, president, or chairman. Elyria, OH-based Invacare makes medical equipment used in non-acute care settings. The company named Geoffrey Purtill interim president and CEO while the board searches for a permanent CEO. Purtill had been serving as Invacare's senior vice president and general manager for the EMEA and APAC regions.

But this CEO turnover trend has not been limited to medtech.

Whether they're joining the Great Resignation, or being forced out involuntarily, CEOs are exiting in droves this year across the board. A recent CEO turnover report from Challenger, Gray, & Christmas shows exits are up 20% year to date.

In the first half of 2022, 774 CEOs left their posts, the highest first half total since the firm began tracking monthly CEO changes in 2002, Challenger, Gray, & Christmas noted. It is up 20% from the 591 CEO exits announced through June last year, and up 6% from the previous high of 728 exits announced in the first six months of 2006.

In terms of what's driving the trend, there are likely several factors at play. Andrew Challenger, senior vice president of Challenger, Gray, & Christmas, pointed out that the skills CEOs implemented and acquired during the pandemic are "extremely valuable" and many of these top-level executives are finding new opportunities.

Broken down by industry, the firm reports that government/non-profit entities lead all industries in CEO turnover with 174 so far in 2022, followed by technology companies with 80, and healthcare/products at 76.

In medtech, some CEO exits have come as quite a shock to the industry, like in April when Dave Demski resigned, effective immediately, from Globus Medical. Demski had been with the company for nearly 20 years and had been at the company's helm for four and a half years. The Audubon, PA-based company quickly promoted Dan Scavilla to take Demski's place. Scavilla has been with Globus Medical for seven years. He started with the company in 2015 as CFO, and in 2019 he was named executive vice president and chief commercial officer. In 2020 he also became president of the company's trauma business. Scavilla previously worked at Johnson & Johnson for 28 years.

About the Author(s)

Amanda Pedersen

Amanda Pedersen is a veteran journalist and award-winning columnist with a passion for helping medical device professionals connect the dots between the medtech news of the day and the bigger picture. She has been covering the medtech industry since 2006.

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