Shares of Perrigo plummeted 18 percent Monday after Joseph Papa resigned as chairman and CEO and the company issued very weak guidance.
The company slashed its first-quarter estimates, as well as its full-year outlook, citing drug pricing expectations.
"The majority of this change in guidance provided on February 18 is the result of a reduction in pricing expectations in our Rx segment due to industry and competitive pressures in the sector," Perrigo said in a statement.
Perrigo's expected earnings per share (EPS) for the first quarter was $1.89, and $9.52 for 2016, according to Thomson Reuters. The drug firm now expects first-quarter EPS of between $1.71 and $1.77, while it sees full-year profits of between $8.20 and $8.60.
Later in the day, Valeant Pharmaceuticals named Papa as its new chairman and chief executive, as was widely expected.
The company said Perrigo's former chief executive is expected to join Valeant early next month.
"He has a strong shareholder orientation, a background in science, and an unmatched track record of accomplishments, highlighted by his ability to lead companies through times of transition and drive excellence across commercial, manufacturing and R&D platforms," Valeant Chairman Robert Ingram said in a statement.
Papa, 60, has been CEO of Perrigo since 2006 and was appointed chairman in 2007.
Perrigo named John Hendrickson as chief executive officer and said it will separate the role of chairman, electing independent director Laurie Brlas to role.
— The Associated Press contributed to this report.