Bloomberg News

Medicis Shares Tumble After Woman Found Dead at CEO’s Home

July 14, 2011

(Updates share prices in first and seventh paragraphs.)

July 14 (Bloomberg) -- Medicis Pharmaceutical Corp., the maker of wrinkle treatments and acne drugs, fell the most in almost five months in New York trading after the girlfriend of millionaire founder and Chief Executive Officer Jonah Shacknai was found dead yesterday at the executive’s beachside home.

The woman, Rebecca Nalepa, 32, was found nude, with a rope around her neck and her hands and feet bound at Shacknai’s home at 1043 Ocean Boulevard, Capt. Tim Curran of the San Diego Sheriff’s Department homicide unit said today at a briefing. Shacknai’s brother, Adam, told police he saw Nalepa hanging over a balcony and cut her down to a courtyard, Curran said.

“This is a very bizarre death, no question about it,” Curran said.

The sheriff’s department hasn’t ruled the death a homicide while the probe continues, Curran said. Adam Shacknai, a guest at the house, is considered a witness, he said. Investigators are in “constant contact” with Jonah Shacknai, who wasn’t home when his brother discovered Nalepa’s body, Curran said.

“There’s no question that Jonah is very much the face of the company and very much a part of the overall vision and strategy,” David Amsellem, an analyst with Piper Jaffray & Co. in New York, said in a telephone interview today. The share decline is “just a little panic selling.”

Annual Compensation

Shacknai, 54, founded Medicis in 1988 and is the chairman. He held 904,214 shares of company stock as of May 19, amounting to about $35 million, according to data compiled by Bloomberg. Shacknai drew a salary of $1.135 million last year, according to a company regulatory filing. His total compensation, including stock awards and non-equity incentive plan compensation, was $6.3 million.

Medicis dropped $1.49, or 3.7 percent, to $38.56 at 4:01 p.m. in New York Stock Exchange composite trading, the steepest decline since Feb. 24. The shares are up 44 percent this year.

It’s unlikely Medicis will see disruption in its day-to-day operations because of the company’s “very good bench strength,” Amsellem said. He has an “overweight” rating on the shares.

Medicis is “deeply saddened to learn of a tragic incident at a California property owned by Jonah Shacknai,” Kara Stancell, a spokeswoman for the Scottsdale, Arizona-based company, said in an e-mailed statement. The company had no further comment, she said.

Medicis makes the acne therapy Solodyn and wrinkle fighter Dysport. The company reported $700 million in 2010 revenue.

Area Landmark

Shacknai’s home is one of the most famous residences in Coronado, an island city about five miles west of downtown San Diego. The 27-room mansion was built in 1908 as a beach home for John D. Spreckels, who owned the nearby Hotel del Coronado and is credited with much of San Diego and Coronado’s real estate and transportation development in the late 1800s and first two decades of the 1900s, according to the San Diego History Center’s website.

Before Medicis, Shacknai worked as an aide in the U.S. House of Representatives, drafting legislation on health care, science policy, the environment and consumer protection, and then served as senior partner in the Washington law firm Royer, Shacknai, and Mehle, according to the company’s website.

Shacknai graduated from Colgate University in Hamilton, New York, with a bachelor’s degree and gained his law degree at Georgetown University in Washington, according to Bloomberg data.

--With assistance from Christopher Palmeri and Shivaune Field in Los Angeles. Editors: Andrew Pollack, Reg Gale

To contact the reporters on this story: Meg Tirrell in New York at mtirrell@bloomberg.net; Nora Zimmett in Los Angeles at nzimmett@bloomberg.net

To contact the editor responsible for this story: Reg Gale in New York at rgale5@bloomberg.net.


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