Tue, Sep 12, 2017 - Page 10 News List

Israeli drugmaker Teva picks Lundbeck’s Schultz

Bloomberg

Teva Pharmaceutical Industries Ltd named H. Lundbeck A/S’ Kaare Schultz as its new chief executive officer, ending a seven-month search for a new leader to revive sales and reduce debt at the world’s largest maker of generic drugs.

Schultz, 56, will move to Israel and be based at Teva’s headquarters in Petach Tikva, the company said in a statement yesterday.

He replaces Yitzhak Peterburg, who has been acting chief executive officer since Erez Vigodman left on Feb. 6 by “mutual agreement” with the board.

The new chief executive officer is likely to face pressure from some investors to split the company into two businesses, one focusing on patented specialty medicines and the other on cheap copycat drugs.

Vigodman departed after Teva shares plunged to a 12-year low amid legal challenges to the company’s best-selling patented drug and price pressures on its generics.

Teva’s situation worsened in the months since, as the company lowered its profit guidance and slashed its dividend.

Shares of Teva jumped 7.8 percent to 58.75 shekels as of 10:45 am yesterday in Tel Aviv trading. Its US depositary receipts on Friday rose 0.2 percent to US$15.50 in New York, giving it a market value of US$15.7 billion. The stock has plunged 57 percent in the past year.

Schultz joined Denmark’s Lundbeck in mid-2015 from Novo Nordisk A/S after he was passed up for the top job at the world’s biggest maker of insulin.

He had spent more than 20 years climbing through the ranks there, gathering commercial and operational experience, before being promoted to chief operating officer in 2002.

When he left, he was also president and first in line to succeed then-chief executive officer Lars Rebien Sorensen.

In April 2015, Novo chose to extend Rebien Sorensen’s tenure at the helm. It also eliminated Schultz’s role as chief operating officer, effectively demoting him.

When Schultz took the helm at Lundbeck, it had been without a permanent chief executive officer for more than five months, since Ulf Wiinberg left in November 2014 after failing to disclose a shareholding in a company in which his employer later made an investment.

Recruitment firm Heidrick & Struggles assisted Teva with the search for the new chief, the Israeli company said in its statement.

Peterburg, who stepped down as Teva chairman to become interim chief executive officer, has put several assets up for sale, closed down factories and announced 7,000 layoffs, all in an effort to stabilize Teva’s financial footing.

The Israeli drugmaker’s debt is more than US$30 billion — twice the value of the company — and Teva warned investors that it risks breaching its debt covenants this year if it does not reap the expected US$2 billion from the asset sales.

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