New CEO at Globus Medical
Robin Young • Wed, August 30th, 2017
In a surprising announcement, Globus Medical, Inc. reported yesterday that founder and CEO, David Paul, would be giving the operational reins and the title of CEO to David Demski, currently Globus’s president of emerging technologies business.
In addition, the company disclosed that David Paul had a health condition which requires him to reduce the amount of time he spends at Globus. His new title will be Executive Chairman and his responsibilities will be to work closely with Demski but devote more time to strategic issues and initiatives, technology and, as he said on the call with Wall Street’s analysts, reflecting on the future of spine.
In Demski’s opinion, this may well result in more innovation for Globus.
Dave Demski, while not a founder, has been one of the key factors behind Globus’s remarkable 15 years of growth from start-up to a $3 billion musculoskeletal company. He joined Globus in 2003, serving initially as chief financial officer from 2003 until 2008. In 2008, he became president and chief operating officer of the company, responsible for all of its domestic and international commercial operations, including sales, marketing, manufacturing, and finance.
During Demski’s tenure as president and COO, Globus Medical consistently delivered above-category growth and profit margins, culminating in the company’s successful initial public offering in 2012. In 2015, Mr. Demski became president, emerging technologies, and assumed responsibility for overseeing the company’s expansion into the areas of imaging, navigation, and robotics, as well as orthopedic trauma, both of which are expected to contribute to the company’s growth over the next decade.
“No one is or could be more well-suited to be CEO of Globus Medical than Dave,” said David Paul. “He has been with us since the very start of this Company, has led virtually every aspect of its operations, and has been a significant contributor to the Company’s success to date. During the seven years when Dave served as President, among his many responsibilities were direct leadership of both our domestic and international sales forces. During that time, and as he took over responsibility for our Emerging Technologies division, Dave honed a talent for optimizing sales team performance and developing and commercializing new products. His skill set is precisely what we need to continue our focus on profitable growth.”
David Paul’s Health Condition
The company did not disclose the exact nature of David Paul’s health issues and, during his call with analysts, no one asked him about his diagnosis.
The only comment that David Paul offered about his health problems is that he expects to make a full recovery over the next several months and will remain actively involved with the company both during his recovery and thereafter.
Wall Street’s Q&A:
Wall Street’s analysts had a few questions for the two Davids and here is a summary (and paraphrasing) of those questions and the answers they received.
Analyst: Any changes to sales and earnings outlook?
Analyst: Are you making any other organizational changes?
A: No. And David Demski will be available to investors as needed.
Analyst: David Paul, what types of things will you focus on?
A: I want to keep focusing on product innovation, research and regulatory. It is going to give me time to get my health back and I intend to fully recover.
Analyst: Your role historically has been impactful, you pulling back in the next few months, how will Globus continue to innovate quickly and differentiate?
A: I get too much credit. Our seasoned veterans will make sure we don’t miss a beat. (Demski added this comment – paraphrased) This change will allow David Paul more time for reflection. The result will likely give Globus more innovation.
Analyst: Any changes in company focus?
A: No. In terms of focus, the most important thing is Excelsius GPS navigation system which we think will drive innovation and implant usage. Over the next couple of years, we’ll be focusing on driving hospital utilization of robotics.
Analyst: M&A front, what are your thoughts? Opportunities?
A: I don’t see that changing. Looking at deals all the time. But we’re very careful. We have a huge opportunity for organic growth with emerging technologies and the synergies they represent.
Analyst: What about core business in second half of the year?
A: First half sales recruitment was good, so that will help in the second half.
Analyst: Can you describe demand for the Excelsius?
A: Hard to predict, we’re quoting for business right now. Capital process is different. Slower than a surgeon trying implants. Given the interest we’re seeing, we’re very encouraged.