Teva's Vigodman becomes third CEO to leave in 5 years
Teva has maintained its habit of changing CEOs rather frequently, as Erez Vigodman has left by “mutual agreement”. He becomes the third CEO to vacate the position in five years in a step that has left investors worried about consistency and organisation at the largest generics manufacturer.
There is no doubt that it has been a rough year for Teva; it lost a key court case to defend the patent-protection upon Copaxone, it was hit by a record $519 million corruption fine by the US and there was the loss of Sigurdur Olafsson as CEO of its global generics business not long after he played a role in the takeover Actavis. The bad news has cumulatively meant that Teva’s shares have lost close to half of their value.
This series of events was enough to put serious pressure on the Vigodman, who had been tasked with turning around the fortunes of the Israel-based pharmaceutical company. He will be replaced on an interim basis by Dr. Yitzhak Peterburg, who will step down from his role as Chairman to act as Interim CEO.
The overarching problem facing Teva is life after Copaxone, or at least life with generic competition to its largest drug responsible for a fifth of Teva’s sales. It has been suggested that part of the reason for Teva’s difficulties are due to a lack of preparation for the event of Copaxone market dominance being challenged. This will be goal for any CEO that comes in, to find a way out of the hole that could be left by Copaxone sales being hit by generic competition – with a potential $1 billion to $1.2 billion lost in sales.
In a short statement after leaving, Vigodman stated: “I believe that now is the right time for me to step down. 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.”
Interim CEO Peterburg said, “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. I look forward to working with the entire Teva team to conduct a thorough review of the business to find additional opportunities to enhance value for shareholders. Teva has a deep bench of talented leaders and today’s announcement has no impact on our ability to execute going forward. With the strength of our generics pipeline, unique R&D capabilities and unparalleled footprint, coupled with our existing assets and growing pipeline in specialty medicines, I believe in Teva and the Company’s long-term growth prospects.”