Israeli generics giant Teva Pharmaceuticals Industries has chewed up three CEOs in just five years, as the company has grappled with pricing pressure, declining sales growth, disappointing acquisitions and, most recently, a bribery investigation. Now the company is confirming it wants a seasoned pharma CEO who can handle the mess.
On Wednesday, interim CEO Yitzhak Peterburg told a crowd of investors at the Jefferies Global Healthcare Conference in New York that Teva is hoping to steal a CEO away from another pharma company, according to Bloomberg. The ideal candidate, he said, “will have the ability to maybe do the restructurings needed, being able to deal with change and with the disruptions that we think are within our industry.”
Peterburg’s remarks echoed those made by interim board chairman Sol Barer, who told analysts during the company’s first-quarter earnings call that Teva would “do what it takes” to recruit the best candidate—even if that means ditching the company’s long-held tradition of hiring Israelis for top posts. The company wants “someone with deep and broad pharmaceutical experience that can lead Teva and take this to the next level as a company,” he said.
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It’s a tall order. Teva bid farewell to its most recent CEO, Erez Vigodman, in February—one month after the company shaved $1 billion off its sales guidance for this year. The culprits: drug launches that fell short, mounting penalties in pay-for-delay lawsuits, and patent losses on Teva’s multiple sclerosis drug Copaxone that further endanger the top line. It didn’t help that Teva’s $40.5 billion purchase of Allergan’s generics business, Actavis, in 2016 was delayed and that it didn’t produce the sales bump analysts hoped to see.
The very day that Vigodman left, news broke that Israeli police are investigating allegations that Teva bribed foreign officials by paying them hundreds of millions of dollars and then falsifying documents to try to conceal the payouts. The investigation is similar to a U.S. case that resulted in Teva paying more than $283 million in criminal fines and $236 million to the SEC to resolve charges that it violated the Foreign Corrupt Practices Act.
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Teva is also weighed down by $35 billion in debt. In May it confirmed rumors that it has put its European oncology and pain businesses and its women’s health unit on the block. The company has also cut 5,000 people since the Allergan deal closed, Peterburg said in May, and it expects more layoffs this year.
Whoever chooses to take on the Teva challenge as CEO will be building an entirely new executive team. Eyal Desheh, chief financial officer, is leaving—a departure that comes six months after generics chief Sigurdur Olafsson jumped ship. Olafsson had been the main champion of the doomed Allergan deal.