About a couple of months after the departure of its President and Chief Executive Officer (CEO), Dr. Jeremy Levin, Teva Pharmaceutical Industries Ltd. (TEVA) announced the selection of Erez Vigodman as the new President and CEO.
Vigodman will take over the helm from acting President and CEO Eyal Desheh on Feb 11. Desheh will resume his previous duties as Group EVP and Chief Financial Officer.
Vigodman has been on Teva’s board since 2009 and his understanding of the company should prove beneficial. Although he does not come from a pharma background like his predecessor Dr. Levin, he has a track record where transforming global and complex operations is concerned. He is known for his strategic planning and has been successful in turning around the performance of companies.
At present, Vigodman is the President and CEO of Makhteshim Agan Industries (MAI), a generic agrochemical company. Vigodman is credited with returning MAI to profitability by bringing about improvements in day-to-day operations and investing in areas that would boost organic growth.
Vigodman has his work cut out for him at Teva. Teva is going through a challenging period – headwinds include EU pricing pressure, potential new competition for branded products and fewer generic product launches compared to 2012. A major challenge for the company will be for Teva to replace Copaxone (multiple sclerosis) revenues once generics enter the market.
With the U.S. Federal Court of Appeals delivering unfavorable rulings regarding the validity of certain Copaxone patents, generic competition could materialize in May 2014, much sooner than expected. Additional competition has entered the multiple sclerosis market in the form of Biogen’s (BIIB) Tecfidera which is off to a strong start.
We expect the new CEO to focus on cost reduction and streamlining of operations. Teva currently carries a Zacks Rank #5 (Strong Sell). Other better-ranked stocks include Impax Laboratories Inc. (IPXL) and Actavis plc (ACT). While Impax is a Zacks Rank #1 (Strong Buy) stock, Actavis is a Zacks Rank #2 (Buy) stock.
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