Coverage: Teva Pharmaceuticals names a new CEO
Generic drug maker Teva Pharmaceuticals has appointed a new CEO in Kare Schultz, who was named seven months after the former chief executive officer stepped down.
Natasha Bach of Fortune.com had the news:
Schultz, who has served as CEO of Danish pharmaceutical company H. Lundbeck A/S since May 2015, will be tasked with reviving sales and reducing debt for the world’s largest generics manufacturer. According to Bloomberg, Schultz will likely face pressure to split the company — with one focusing on “patented specialty medicines and the other on cheap copy cat drugs.”
The pharmaceutical company has had a rocky few years. With increased competition from cheaper copycats and costly acquisitions that quickly soured, Teva has been left with more debt than its market value as recently as last month.
In August, stocks reached a nearly two decade low, and Teva announced that it would be retreating from 45 markets and slashing as many as 7,000 jobs by the end of the year. Shareholder confidence dropped in kind, and shares fell by 50% since August.
Tomi Kilgore of Marketwatch.com reported that the stock rose Monday by the most since 1984:
The stock soared 19.4% on the day, its biggest one-day percentage gain since its record rally of 23.1% on Sept. 6, 1984. Volume ballooned to over 90 million shares, enough to make the stock the most active on major U.S. exchanges, and more than triple the full-day average of about 27.6 million shares, according to FactSet.
The Israel-based company ended a five-month CEO search after it said earlier Monday that Kare Schultz, from Denmark-based drugmaker H. Lundbeck A/S, would take over. The search began in February when former CEO Erez Vigodman left the company without explanation.
The rally comes after the stock lost more than half its value since the end of July, highlighted by a 24% plunge on Aug. 3 after Teva missed second-quarter profit expectations and slashed its full-year outlook. The stock had closed at a 15-year low as recently as Sept. 5.
Linda Loyd of The Philadelphia Inquirer reported that the company still faces issues:
Schultz said that he was honored to join Teva, an “iconic company” that he has long admired. “What drew me to Teva, and what makes Teva different from its peers, is its unique commitment to growing an extensive global reach while continuing to provide new and high-quality treatments for patients, and an innovative culture for its employees,” Schultz said.
In July, reports circulated that Teva was going to offer the top job to AstraZeneca CEO Pascal Soriot. Soriot remained with AstraZeneca, whose U.S. headquarters are in Wilmington.
In August, Teva announced it would cut 7,000 jobs by year’s end, close or sell 15 factories, and quit operations in 45 countries. None of the scheduled plants to be shut or sold are in Pennsylvania or New Jersey. The bulk of the jobs cuts are not here, either.
Among Teva’s challenges are looming competition for its best-selling branded multiple-sclerosis drug, Copaxone. The drug maker lost a patent-infringement case in February to protect Copaxone from lower-cost generic competition.