Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has done it again. For the third time in seven years, it has had a disruptive leadership succession. In 2006, Shlomo Yanai succeeded the veteran Israel Makov, in a process seen as stormy and unplanned; in 2012, after a flood or rumors about dissatisfaction with Yanai, Teva announced the appointment of Dr. Jeremy Levin as CEO; and today came the lowest ebb of all. Levin is leaving, effective immediately, a day before the publication of the company's third quarter financials, and there is no successor. Longstanding CFO Eyal Desheh has been appointed acting CEO.
After weeks in which Teva's public image has been in the dumps, because of the layoffs it announced, it has further damaged its image with the capital market, and its share price is being battered.
Teva chairman Dr. Phillip Frost is proving himself to be the strongman at Teva. Just two days ago, on Monday, Levin denied that he intended to resign his post, and yet now he is leaving. "The board of directors has agreed with Dr. Jeremy Levin that he will step down as president and CEO," said Teva is a statement.
But will Frost's position stay unassailable? 18 months ago, around the time that Levin joined the company, Teva's board of directors erupted in a storm. Scions of two of the company's founding fathers, Chaim Hurvtiz and Amir Elstein, considered themselves candidates to replace Frost (76) as chairman. In the end, Frost was reelected to another three-year term, but in view of the earthquake at the company his standing may now fracture.
Who will succeed Levin? Will Desheh stay on as the permanent successor, will someone within the company's ranks be promoted (for a change), or will a foreign big pharma executive be appointed to the job? Whoever he is, Teva's next CEO will have to deal with the hot potato called Copaxone, the company's flagship product, which is facing a slump in its market position that will drag down Teva's profits.
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2013
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