David Floyd, the former CEO of DePuy Orthopaedics, starts a new gig today: CEO of OrthoWorx, an “industry, community and education initiative” that aims to boost the orthopedics cluster centered in Warsaw, Ind.
Floyd stepped down as chief executive of the Johnson & Johnson (NYSE:JNJ) subsidiary last March, amid a damaging recall of one of its hip replacement lines that’s already cost it nearly $1 billion in legal expenses.
“We are delighted that David has agreed to join our organization,” chairwoman Cheryl Blanchard said in prepared remarks. “David’s industry experience as the global head of a multi-billion dollar orthopedic enterprise, his leadership in the creation and launch of OrthoWorx, and his deep connections to the Warsaw community make him ideally suited for this position.”
Floyd was a founding member of the OrthoWorx board, where he served until shortly after leaving DePuy. Named president of division in Sept. 2007, after coming over from Abbott’s (NYSE:ABT) spine division, his arrival was accompanied by some fanfare due to his connections to Warsaw – he was an executive at Warsaw-based Zimmer Holdings (NYSE:ZMH) and went to college in the area, according to a 2007 article in the Journal Gazette.
“I am delighted to join OrthoWorx and to be able to draw on my experiences in leadership and in the orthopedic industry in a different way – to help the Warsaw region continue to thrive as the orthopedic capital of the world,” he said in prepared remarks. “The orthopedic industry has been a great Indiana success story and I believe it can continue to be a powerful driver of our region’s overall economy.”
OrthoWorx was established “to advance and support growth and innovation within the region’s uniquely concentrated, globally significant orthopedics device sector,” according to its website. It’s funded in part by the Lilly Endowment and was founded in 2009.
While the company performed well during Floyd’s tenure, its fortunes began to change in August 2010 after it initiated a massive recall of its ASR hip replacement system after receiving reports that a higher-than-normal number of patients required surgeries to correct or remove defective implants.
The company said it pulled its ASR XL Acetabular and ASR Hip Resurfacing systems from the market “due to the number of patients who required a second hip replacement procedure, called a revision surgery.”
Since then, numerous product liability lawsuits have piled up against DePuy, alleging that the company knew of design problems with the implants but failed to adequately warn physicians. DePuy introduced the ASR in the U.S. in 2005 after winning 510(k) clearance from the FDA.
Johnson & Johnson officials said the company paid nearly $1 billion in legal costs and settlements in 2010 related to the hip implant recall. Since then, lawsuits have continued to mount, with more than 350 filed in August 2011 alone.