Erez Vigodman, who will sit in the CEO's chair at Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) in February, will be the company's fourth CEO in seven years, and the fifth, if we take acting CEO Eyal Desheh into account. This is not really the stability that a pharmaceutical company needs, given the industry's long-term processes and the stamina needed to carry them out.
Like his two predecessors in the job - Shlomo Yanai and Jeremy Levin -Vigodman has not been promoted from within Teva's ranks. Like Yanai, he is coming from managing Makhteshim Agan Industries Ltd., a fact which might result in negative connotations among some shareholders.
However, in contrast to Yanai and Levin, Vigodman has an advantage, in that he has been a Teva director for several years, and has learned about the industry, the company, and, most of all, the relationships between Teva's executives. The disadvantage is the question that shareholders may ask themselves about the degree of his culpability, as a director, for the controversial changes undergone by Teva in recent years.
Another of Vigodman's advantages, compared with his predecessors, is that expectations for Teva have fallen so low, and after all the bitter medicine that Teva's share price has fed its investors in the past few years (a 35% drop since March 2010), it may be hard for him to disappoint them further.
Moreover, the generic competition against Copaxone - the shareholders' greatest fear for years - is now just around the corner. If the US Food and Drug Administration (FDA) approves a generic Copaxone, it will reach market in four months. While this is bad news for Teva, it will finally lift the cloud which has hung over the company for such a long time, and create certainty, something that the capital market likes so much.
Vigodman "provides strong strategic expertise across multiple industries and deep insight into global market dynamics," says Teva is the subhead to its announcement of his appointment. The body of the text includes a quote by vice chairman Amir Elstein, "Erez stood out due to his impressive track record in transforming global and complex corporations and delivering breakthrough results." The press release then goes on to list Vigodman's achievements at Makhteshim.
It is not clear how this fits with the fact that Teva chairman Dr. Phillip Frost's promise that Levin's strategy for the company will be implemented. It is more likely that, in the medium term, Vigodman will set his own strategy for the company.
Published by Globes [online], Israel business news - www.globes-online.com - on January 9, 2014
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