Teva's transparency just the tonic

Shiri Habib-Valdhorn

It looks as though the market is expressing its belief in new CEO Jeremy Levin who is expanding the concept of transparency.

Investor credibility in Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) was hit back in the days when Shlomo Yanai was CEO. He realized this and tried to improve the situation by increasing transparency. His successor, the current CEO Dr. Jeremy Levin has expanded the concept of transparency, and provided investors with data that was previously kept close to the company's chest, such as the level of gross profit for Copaxone (if not the contribution of Copaxone to net profit).

For the time being, it looks as though the market is expressing its belief in Levin - the company's disappointing guidance led to a fall in the share price on the opening on the New York Stock Exchange on Friday, but by the start of the conference call, Levin and CFO Eyal Desheh soothed the market and even led to a slight rise in the share price.

The day for Teva to present its strategy was fixed as December 11 some time ago. Teva also promised to present its 2013 guidance before that date. In that case, why was Teva's guidance published on a Friday when the Tel Aviv Stock Exchange (TASE) is closed and Israeli investors, brokers and analysts aren't working? Teva announced at midnight between Thursday and Friday Israel time that it would publish the guidance the following afternoon. Does this fact suggest that the company does not take into account Israeli investors?

The five year strategic plan that Yanai built for Teva was finally cancelled on Friday. Levin did everything to distinguish Teva as it is today from Teva as it was before. The strategic plan that Yanai built as Makhteshim Agan Industries Ltd. CEO was also cancelled by his successor. Yanai can console himself with his new appointment as vice-chairman of US drug development company Cambrex Corp. (NYSE: CBX) where he will earn an annual remuneration of $170,000.

Published by Globes [online], Israel business news - - on December 2, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018