CORRECTED-UPDATE 2-Medical device maker Stryker names Kevin Lobo CEO
(Corrects Stryker Corp stock symbol to SYK.N from SKY.N; the error also occurred in UPDATE 1)
* Lobo succeeds interim CEO Curt Hartman * Hartman to leave company * CEO search had been underway since February * Stock falls 0.4 pct in midday trading By Toni Clarke
Oct 1 (Reuters) - Medical device maker Stryker Corp on Monday named Kevin Lobo, head of its orthopedics unit, as president and chief executive following an eight-month search.
Lobo, who joined Stryker in April 2011, will replace Curt Hartman, the company's chief financial officer and interim CEO who took over the top job following the abrupt resignation in February of Stephen MacMillan and was considered a contender for the top job.
Stryker said Hartman is leaving the company to pursue other opportunities, but will remain as an adviser to the CEO to ensure a smooth transition as the company searches for a new CFO.
"Hartman had been serving as interim CEO and presumably lost out on an internal competition for the top spot," said Derrick Sung, an analyst at Sanford Bernstein, in a research note.
Lobo, who will also sit on the company's board, has held executive positions in general management and finance at a variety of healthcare companies, most recently at Johnson & Johnson , which he joined in 2003 as CFO of the McNeil Consumer Healthcare unit.
In 2006, Lobo became president of Ethicon Endo Surgery, a J&J unit that sells gastric bands, staples and other surgical equipment. In 2011, the unit generated revenue of $5.1 billion, according to J&J.
Investment analysts cautiously welcomed the news, which comes as medical device makers are struggling to boost growth at a time cash-strapped consumers are cutting back on many elective procedures. But they lamented Hartman's departure.
Jeremy Feffer, an analyst at Cantor Fitzgerald, said in a research note that Lobo is "a solid choice," given his experience in the orthopedic business as well as international experience.
"We are less positive on the Hartman news, as he had risen steadily through the ranks since joining Stryker in 1990 and is generally well-liked by the Street," he said.
Stryker's shares fell 0.4 percent to $55.44 in midday trading on the New York Stock Exchange.
Sanford Bernstein's Sung said that while Lobo comes to the position with a strong record of operational management experience, "his experience around capital allocation and M&A, the key issues surrounding Stryker's stock today, remain relatively unknown."
Mergers and acquisitions activity in the medical device sector fell during the global financial crisis, but industry experts say the situation is likely to change as companies seek out innovative new products.
Under MacMillan, who became Stryker's CEO in 2005, the company diversified into into new areas through a series of acquisitions, reducing its exposure to the slowdown in orthopedics sales.
In 2011 it acquired a Boston Scientific business that makes coils, guidewires and stents to treat neurovascular disease. It also acquired Orthovita Inc, an orthopedics biologics maker; and Concentric Medical, a maker of stroke treatment devices.
David Lewis, an analyst at Morgan Stanley, said the choice of Lobo suggests the company will continue to focus on orthopedics sales outside the United States, "where performance over the last two years has been less than optimal."
While some analysts expressed concern that the company did not reiterate its financial forecasts, Lewis said the decision was likely "a prudent decision to give Mr. Lobo time to evaluate the strategic plan."
Stryker last month said it had to expand a recall of its latest Neptune surgical waste management product line because regulators said it did not have proper regulatory clearance.
(Additional reporting by Adithya Venkatesan in Bangalore and Caroline Humer in New York; Editing by John Wallace and Leslie Gevirtz)
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