Generic drug giant Teva Pharmaceutical Industries Ltd. surprised the financial community Wednesday by announcing that Chief Executive Officer Jeremy Levin had "agreed" with the board of directors to resign immediately, less than two years after joining the company. Chief Financial Officer Eyal Desheh will take over as interim CEO.
Generic drug giant Teva Pharmaceutical Industries Ltd. surprised the financial community Wednesday by announcing that Chief Executive Officer Jeremy Levin had “agreed” with the board of directors to resign immediately, less than two years after joining the company. Chief Financial Officer Eyal Desheh will take over as interim CEO.
Teva sells more generic prescription medicine than any other company in the world, but it also relies on a brand-name multiple sclerosis drug called Copaxone and collaborates with Procter & Gamble on selling consumer products. Desheh said Wednesday that Teva expects total revenue for 2013 to be between $19.7 billion and $20.3 billion, and it will release third-quarter financial results Thursday. Those numbers might shed more light on Teva’s struggle in recent years to help its stock price by reorganizing to increase profit through the right mix of higher-margin brand-name drugs, generics and cost cutting.
Levin was hired Jan. 1, 2012, to make all that happen. He announced a $1.5 billion to $2 billion cost-cutting plan and then said in early October the pace of change would quicken, including plans to slice 5,000 more jobs by the end of 2015.
Teva is Israel’s largest publicly traded company, but also employs about 2,300 people in Pennsylvania. A spokeswoman declined to say if there would be a tangible effect on Philadelphia-area facilities and employees.
“Since Dr. Levin’s arrival, he and the board have been fully aligned on the strategy,” board Chairman Phillip Frost said Wednesday. “However, we have had different views on how to carry out that strategy.”
Frost gave no examples.
“I wish the company and its people, who I respect greatly, every success,” Levin said in the statement issued by Teva. “I look forward to pursuing new opportunities where I can continue to apply my experience and contribute to the evolution of the global pharmaceutical industry.”
A dermatologist by training, Frost, 76, grew up in South Philadelphia, but lives in South Florida. He presided over Wednesday’s contentious conference call with financial analysts (reporters could only listen), several of whom questioned him on board-management relations.
Frost was asked by one analyst if he was going to resign (no) and by a second if he was going to be CEO (no), since reports have suggested Levin and other leaders complained about too much board meddling.
Bernstein Research analyst Ronny Gal worried that another leadership change will only delay necessary fixes, headlining his note to clients: “CEO departure is material setback; reducing price target to $43.” Trading of the stock on the Tel Aviv stock exchange was suspended Wednesday when the announcement was made. In New York, the stock fell 8.1 percent, or $3.32, to close at $37.70.
Frost was undeterred.
“I am as enthusiastic about the future of the company,” he said, “as I’ve been at any time that I can recall.”
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