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Medicis' Shacknai Addresses Deaths at His House by Insisting on Business as Usual

In a calm, unwavering voice, Medicis (MRX) CEO Jonah Shacknai addressed the public directly Aug. 8 for the first time since the mysterious deaths of his 6-year-old son Max and his 32-year-old girlfriend Rebecca Zahau Nalepa in July, and he had a simple message: It is business as usual at Medicis. (See full transcript of the introductory remarks following the list of related stories below.)

His words came at the start of Medicis' Q2 2011 conference call. The least of the news on that call was that, despite the bizarre double fatalities in a single week at his Coronado, Calif., mansion a month ago, the company added 10 percent in revenues, bringing its Q2 to $191 million.

The deaths and the downturn in Medicis shares -- along with the broader market -- brought out the jackals, with sources telling the Wall Street Journal that rival Valeant (VRX) has approached the company with a view to buying it. Valeant has previously described Medicis as a "lightweight" in the skincare business after acquiring the skincare unit of Johnson & Johnson (JNJ) in July. Medicis sells Dysport and Restylane, competing cosmetic dermatology products to Allergan (AGN)'s Botox and Juvederm franchises.

Shacknai began the call -- wisely -- by addressing the one issue that most people, investors included, are most interested in: The police investigation into the discovery of Zahau Nalepa's nude body, found hanging in Shacknai's beachfront house, just two days after his son suffered a fatal fall down the house's stairs (see a timeline of the deaths at the Shacknai house here):

Over the past few weeks, I've obviously been spending time with family and loved ones. And during that time the company's day-to-day operations have continued without interruption.
... I expect very quickly to return to the normal work schedule at the office.
He expressed his heartfelt thanks to colleagues, employees, customers and shareholders for their support at this "extraordinarily difficult time," but concluded with a clear signal to any Wall Street analyst not to ask whether he was too distracted by the investigation to continue running the company:
So that having been said, I'd like to turn to our normal course of business, our second-quarter results. And then of course our team is here to answer any business related questions you may have.
No other mention of the deaths was made on the call.

Shacknai is back
Shacknai then gave a monologue on the state of Medicis' business, which is robust. He did so in the same measured tones, obviously from a written script, in which he described the aftermath of the deaths. Shacknai said he'd been "in touch daily" with the company and that:

I expect very quickly to return to the normal work schedule at the office. School commences momentarily in Arizona. At this time, I've really been with the kids, waiting for school to begin. But as soon as that happens, I expect to be on my my normal calendar in the office doing all the things I have done previously.
In other words, "I'm back." After his prepared remarks, Shacknai fielded routine questions about Medicis that, given circumstances, were anything but. He even had the presence of mind to refer to Botox without naming it, as "the other neurotoxin" on the market.

One PR strategy Shacknai might have employed would be to read his opening statement, give an overview of the business and then let his team handle the questions. No one would have questioned that. A lot of CEOs handle quarterly calls that way. But Shacknai answered all the questions he was asked, as if there were no other context to the call. Like a lot of things when it comes to management, what was unsaid was more important than what was said.

The good news is that there appeared to be some sympathy on Wall Street for Shacknai, which might be useful for Shacknai to draw upon if he does have to fight a takeover from the Borg-like Valeant. David Steinberg of Deutsche Bank responded to the answer Shacknai gave him with the words, "Good to hear your voice."

Related:

Full text of Jonah Shacknai's introductory remarks to his Q2 2011 conference call:

Before I begin our discussion today, I want to express a personal note of appreciation. So many of our shareholders, as with our customers and employees, have provided me and our family wonderful encouragement and support. We've obviously had an extraordinarily difficult time. We have undertaken some tragedies, some losses, that one couldn't imagine experiencing in a lifetime, and the communications and emails, the notes of condolence, the warm wishes, the contributions to the Whispering Hope Ranch Foundation, that have been expressed both directly and through our investor relations team, are highly appreciated. I can't thank you enough for those and they are so meaningful.
Over the past few weeks, I've obviously been spending time with family and loved ones. And during that time the company's day-to-day operations have continued without interruption. And the Medicis executive team, which I'm very proud to serve with, has moved forward executing against every one of our outlying objectives. I have been in touch daily with our colleagues at Medicis. I have obviously been briefed on all matters that are important and relevant to our business. And I have undertaken meetings particularly with our sales and marketing group, where I'd like to think I contribute a bit.
And I expect very quickly to return to the normal work schedule at the office. School commences momentarily in Arizona. At this time, I've really been with the kids, waiting for school to begin. But as soon as that happens, I expect to be on my my normal calendar in the office doing all the things I have done perviously.
Obviously at a time like this, one does a lot of introspective thinking and it makes me appreciate that much more, although I did already, how privileged I am to work with such a cohesive, capable and experienced executive team at Medicis and of course, a very, very strong and supportive board of directors. We have superb employees. They are dedicated, they are helpful, they have reached out to me in so many ways over the past few weeks. Our sales force, everyone has just been wonderful both in their expression of support and sentiment, and again, for this I am extremely grateful.
So that having been said, I'd like to turn to our normal course of business, our second-quarter results.