With the appointment of Erez Vigodman as president and CEO of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), a change in the board of directors may be next, suggests Citi Research analyst Liav Abraham. The reason is the attempt by Teva activist shareholder Benny Landa to appoint directors with experience in the pharmaceutical industry.
"I welcome Vigodman's appointment. He is a man of stature who needs a serious board of directors to succeed in his job, said Landa today, leaving no doubt that he will pursue his campaign. Abraham says, "The current structure of Teva's board of directors is a disadvantage compared with its peers." She adds that Vigodman's appointment is good news for shareholders.
"This is a good appointment compared with the other Israeli candidates, because of Vigodman's familiarity with the company and persuasive managerial track record," says Bank of Jerusalem analyst Jonathan Kreizman. "His ties with and knowledge of the Chinese market could help Teva enter China, which has been defined as a target market. However, we believe that the market would have preferred the appointment of someone more like Jeremy Levin, a candidate with a strong background in pharmaceuticals. Vigodman's appointment heightens the responsibilities placed on Teva's CSO Prof. Michael Hayden, who will be the top authority in setting the company's development."
Excellence Brokerage analyst Gilad Alper says, "Even the most skilled CEO would need time, money, and luck to overcome the challenges facing Teva. To have enough time and resources, Vigodman must have a healthy Copaxone business. If generic versions of Copaxone are launched in May, Teva's profits are liable to fall so fast that he will simply not have enough time to rescue the company from its crisis. It should be noted that even if the generic Copaxone launch is delayed, the challenges are great, but at least he will have a chance to protect Teva's independence."
Published by Globes [online], Israel business news - www.globes-online.com - on January 9, 2014
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