Depomed replaces CEO, board members under deal with activist investor

Depomed announced that CEO James Schoeneck resigned from his position amid a battle with activist investor Starboard Value. The company indicated that Arthur J. Higgins, former chief executive of Bayer's healthcare unit, has been appointed as CEO. Shares in the company fell nearly as much as 7 percent on the news.

Further, Depomed said that Higgins, along with William McKee, former chief financial officer at Barr Pharmaceuticals, and Starboard Value partner Gavin Molinelli have joined the board of directors. In addition, Samuel Saks and David Zenoff have resigned from the board.

Molinelli remarked "we are pleased to have reached an agreement to work with Depomed," adding "we believe that Arthur Higgins is an excellent choice to lead Depomed." The moves come after the drugmaker reached a settlement deal with Starboard Value in October, under which the shareholder added three independent directors to Depomed's board.

Starboard, which holds a nearly 10-percent stake in Depomed, unveiled plans last year to replace six members of Depomed's board of directors, having objected to actions taken by the drugmaker to resist a hostile takeover attempt by Horizon Pharma.