A pharmaceuticals sector exchange traded fund perked up Friday after Endo International (NasdaqGS: ENDP) Chief Executive Rajiv De Silva stepped aside to be replaced by generics division head Paul Campanelli.
The SPDR Pharmaceuticals ETF (NYSEArca: XPH) rose 0.8% Friday. Meanwhile, ENDP shares jumped 16.1% on the shift in management.
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XPH follows a more equal-weight indexing methodology and includes a 4.3% weight in ENDP. Consequently, the pharma EF has a larger tilt toward smaller companies, including 16.2% micro-caps, 31.1% small-caps and 17.9% mid-caps, along with 8.9% large-caps and 26.0% mega-caps.
Under De Silva, a former senior executive at Valeant Pharmaceuticals (NYSE: VRX), Endo’s business model centered around acquisitions to fuel growth, Reuters reports.
Endo shares have declined 67% this year, among the worst performer in the broader health care index. The company also maintained its profit and revenue forecasts for the year.
Analysts argue that Campanelli’s appointment revealed the growing importance of Endo’s generics business.