Teva Signals It's Seeking New Chief With Experience at HelmBy
Criteria for new CEO is like “a wish list for a spouse”
Drugmaker says pharma experience will also be a requirement
Teva Pharmaceutical Industries Ltd., the world’s largest maker of copycat medicines, signaled its intent to hire a new chief executive officer with prior experience in that role.
The Israeli drugmaker expects to pick someone who is at the “CEO level today,” Teva’s interim chief Yitzhak Peterburg said at the Jefferies Global Healthcare Conference in New York Wednesday. The person would also need to have “very, really important, background in pharma,” he said.
Peterburg’s comments reflect the pressure that the drugmaker is under from investors to find the right person. Teva’s New York-traded shares are near a 12-year low after the company in February parted ways with its third CEO in five years. The generics maker is also struggling with $35 billion of debt, which is in excess of its market value, following its acquisition of Allergan Plc’s unit. Sales of its bestseller Copaxone are likely to be eroded by cheaper rivals, while competition is dragging down prices in its largest business.
“It’s almost like a wish list for a spouse,” Peterburg said of the firm’s search criteria. The chosen candidate “will have the ability to maybe do the restructurings needed, being able to deal with change and with the disruptions that we think are within our industry.”
Chief Financial Officer Eyal Desheh is also leaving the Israeli company, making him the third senior executive to step down in recent months and compounding matters for the drugmaker at a critical juncture. Sigurdur Olafsson, the former head of the global generics division and one of the architects of the deal with Allergan, quit in December.
Former CEO Erez Vigodman, who was also key in engineering the Allergan deal last year, stepped down in February after the transaction failed to live up to the sales boost he promised. That revealed cracks in Teva’s strategy of aggressive acquisitions that made it into a pharmaceutical giant but also left it with a mountain of debt.
Finding the best successor to him may mean Teva has to abandon some of its unspoken principles: namely, that the CEO be Israeli and live near Tel Aviv. The drugmaker may also need to boost its compensation package multiple times to lure qualified people.
The company is now focused on “several” candidates and expects to hire a new chief within the coming “weeks to months,” Peterburg said. He declined to name any of the prospective hires or the firms they work for.
“Most probably, we wouldn’t find somebody who knows everything about generic and everything about specialty and everything about manufacturing,” the interim CEO said. “So we are looking on people that are coming from different parts of the industry.”
Teva hired executive search firm Heidrick & Struggles Co. to help find the new CEO.