Shares of Orthofix Medical Inc. (OFIX) experienced a significant decline of 17.1% in premarket trading on Tuesday, plummeting to a 10-month low. This drop came immediately after the spine and orthopedics company announced the termination of Chief Executive Keith Valentine, Chief Financial Officer John Bostjancic, and Chief Legal Officer Patrick Keran. These terminations were made “for cause” following an investigation conducted by independent counsel.
The investigation revealed that each of these executives had engaged in repeated inappropriate and offensive conduct that violated multiple code of conduct requirements. Orthofix emphasizes that these actions were inconsistent with the company’s values and culture. However, the company assures stakeholders that these matters are unrelated to its strategy, financial performance, or previously filed financial statements.
As part of the management restructuring, Orthofix has appointed Catherine Burzik, Chairperson of the Board, as interim CEO. Additionally, Geoffrey Gillespie, Corporate Controller, will step in as interim CFO, and Puja Leekha, Chief Ethics and Compliance Officer, will serve as interim CLO. The company will commence the search for permanent successors to fill these roles.
Despite this recent setback, it is important to note that Orthofix’s stock performance had already dipped by 9.3% year-to-date prior to this announcement. In comparison, the S&P 500 has witnessed a gain of 16.9% over the same period.