Teva Chairman Phillip Frost to Step Down as Board Size ReducedDavid Wainer
Teva Pharmaceutical Industries Ltd. Chairman Phillip Frost plans to retire before his term ends next year as the world’s largest maker of generic drugs overhauls its board.
“I have advised the board that I believe it will be appropriate for me to step down as chairman approximately by the end of this year,” the Miami-based billionaire said in a letter to shareholders released by Teva today. Teva nominated Jean-Michel Halfon, a former head of emerging markets at Pfizer Inc., to the board, and said Chaim Hurvitz, Dan Suesskind and Dafna Schwartz plan to retire as directors this year.
The changes may ease the concern among some shareholders that Teva’s board was too big, rife with internal feuds and was meddling in company operations. Teva pledged to overhaul the board after Chief Executive Officer Jeremy Levin departed last year amid a dispute with the board.
Investors led by Benny Landa called on the board to seek pharmaceutical veterans to support new CEO Erez Vigodman as Teva streamlines operations to overcome a slowdown in sales growth.
Teva’s American depositary receipts rose 1 percent to $51.95 at 9:35 a.m. in New York.
Discussions “regarding our corporate governance are ongoing,” Frost, 77, said in today’s letter. “Corporate governance is a priority for the board, and we will continue to evaluate the size and composition of the board.” The board’s Corporate Governance and Nominating Committee is working on a succession plan for him, he said.
Frost said this year he was considering retirement if he could deliver on improving board governance.
Under Frost, Teva has struggled to find new sources of revenue as the multiple-sclerosis treatment Copaxone, which analysts say accounts for more than half of profits, faces competition from newer oral drugs and possible generics this year.
Frost oversaw Teva’s transition from a producer of mainly copycat treatments to innovations in areas such as neurology and respiratory treatments. As Frost steps down, Teva director Dan Propper has positioned himself as a possible replacement, two people familiar with the matter told Bloomberg in February.
Propper, 73, served as CEO of Osem Investments Ltd. for 25 years and president of the Manufacturers Association of Israel for six. Propper now heads the governance and nominating committee that will choose how to slim down Teva’s board and bring in new members.