Yet another Teva executive is heading out the door, and at least one analyst has some concerns about his departure.
Teva’s president and CEO of North America Generics, Andy Boyer, has tendered his resignation, according to Wells Fargo analyst David Maris, and he’ll pack his bags for a departure next quarter. He’s following generics CEO Dipankar Bhattacharjee to the exit; Bhattacharjee lost his job a couple weeks back when the company, under the direction of Lundbeck vet and new CEO Kåre Schultz, unveiled a new structure that put generics and specialty meds under one roof.
While Maris understands the argument that Teva’s generic segment leadership “bears some large responsibility” for failing to anticipate the major pricing pressure afflicting the copycat industry, the way he sees it, now is not the time to let those leaders walk.
“We would argue that with a new outsider CEO with no experience in the generic drug industry, allowing or asking those with deep industry and regulatory ties to leave may be ill-timed,” he wrote in a note to clients, adding that Boyer worked for Teva and its Actavis predecessors for approximately 18 years, and Bhattacharjee chipped in six with the Israeli drugmaker.
As Maris predicts, credit agencies will meet with Teva in the near future and “management turnover will be among the topics covered.” He expects to see a downgrade of “one or more notches,” driven in part by the lack of track record of the new management in this industry, as well as that management’s “quixotic” plan to attempt price hikes on knockoffs “in a sector that has seen widespread price declines in the past year.”
Of course, tweaking prices is just one piece of Teva’s plan to get its struggling generics portfolio back on track. It’s also planning product discontinuations that will in turn speed up closures and selloffs of “a significant number” of manufacturing plants in the U.S., Europe, Israel and emerging markets, it said Thursday. And that’s not to mention the 14,000 layoffs it’s planning across the company.
Meanwhile, Boyer isn’t the first exec to hand in his resignation this week. Yitzhak Peterburg, who served as Teva’s interim CEO this year and chairman before that, left the board Wednesday before the job cut news hit.