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Teva (TEVA) CEO Abruptly Steps Down, Ex-Celgene (CELG) Boss Named Chairman of the Board

2/6/2017 8:25:42 PM

Teva CEO Abruptly Steps Down, Ex- Celgene Boss Named Chairman of the Board February 7, 2017
By Alex Keown, Breaking News Staff

JERUSALEM – Erez Vigodman has stepped down from his position as chief executive officer of Teva Pharmaceuticals (TEVA), the world’s largest generic drug manufacturer by sales, the company announced this morning.

Shares of Teva fell about 3 percent in premarket trading to $33.60 following the announcement.

“I believe that now is the right time for me to step down,” Vigodman said in a statement. “It has been a privilege to lead Teva, and I am proud of all we have accomplished. I am confident that the company’s future is bright.”

Vigodman took over the helm of Teva in January of 2014, serving a scant three years at the top of the company. In its statement this morning, Teva said the separation was by mutual agreement between Vigodman and the board of directors. His tenure as CEO has seen several stumbles, which have caused several investors to call for a change in management, Fortune reported this morning. Vigodman oversaw a number of deals that have been called into question, including the acquisition of Actavis (ACT), the generic drug business of Allergan for $40.5 billion—a price that many analysts thought was too high. The company has also been embroiled in legal action with Mexican drugmaker Rimsa and in December paid out $519 million to settle parallel civil and criminal charges that it allegedly violated the Foreign Corrupt Practices Act when it paid bribes to foreign government officials in Russia, Ukraine, and Mexico between 2002 and 2012.
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Vigodman is leaving as Teva faces challenges from its top branded drug, Copaxone, which is used to treat multiple sclerosis. The drug accounts for about 16 percent of Teva’s sales, but is facing a patent challenge by a generic drug developed by Novartis (NVS). Patents protecting the drug expired in 2015, analyst Todd Campbell wrote last week in The Motley Fool. The company was able to side-step some of the potential losses by changing dosing levels, but that is now being challenged by a generic version developed by Mylan (MYL). In August, the U.S. Patent and Trademark Office ruled that two patents on Teva’s MS drug Copaxone were unpatentable, which paves the way for other generic drugmakers.

Additionally, last month Teva provided a revenue and profit forecast for 2017 that is below Wall Street estimates, Forbes noted. Teva is expected to release its fourth quarter 2016 financial results on Feb. 13.

Yitzhak Peterburg is stepping down from his role as chairman of Teva’s board of directors to take over the position of interim CEO. Petersburg previously led Teva’s R&D efforts as group vice president of Teva’s global branded products division. Sol J. Barer, the former CEO of Celgene (CELG), will assume the role of chairman of the board of directors, Teva said.

Peterburg said he plans to conduct a “thorough review” of the company’s to identify opportunities to enhance value for investors.

“The company is focusing on executing its strategic priorities to transform Teva, with immediate focus on realizing the cost synergies and strategic benefits of the Actavis Generics acquisition,” Peterburg said in a statement.

Teva said the board of directors is searching for a permanent CEO.

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