Former Teva Generics CEO Siggi Olafsson is back in the copycat game—this time, as the new CEO of Jordan’s Hikma Pharmaceuticals.
The company trumpeted the appointment Tuesday, noting that current CEO Said Darwazah would slide over into the executive chairman’s spot. In a statement, Darwazah praised Olafsson’s “deep sector knowledge” and “proven ability to drive growth,” adding that “we are delighted that Siggi is joining Hikma as our new CEO.”
In a major—and unwelcome—surprise to Teva shareholders, Olafsson left his long-held post at the Israeli company in December 2016.
The news stirred up big concerns about the drugmaker’s then-recent $40.5 billion purchase of Allergan’s generics unit. After all, Olafsson had been "a champion" of that deal, Credit Suisse analyst Vamil Divan said at the time.
Turns out that concern was warranted. Pricing pressure mounted on the generics sector, and Teva got hit hard.
Olafsson’s was just the first in a string of executive departures that continued throughout 2017, culminating in a revamped executive structure engineered by new CEO Kåre Schultz. And that revamp eliminated Dipankar Bhattacharjee, Olafsson’s replacement.
Meanwhile, Hikma’s investors celebrated the CEO switch Tuesday, though Jefferies analyst James Vane-Tempest cautioned in a note to clients that “any improvements are likely to be gradual.”
“2018 in our view is still likely to be tough,” he wrote, adding that Hikma “is still challenged by near-term headwinds, and we believe that full-year results on March 14 could disappoint for a number of reasons.”
A couple of those reasons? More competition in generic injectables and the “potential for larger write-downs” at recent buy Roxane Labs.
Investors are also still waiting for word on Hikma’s copy of GlaxoSmithKline respiratory heavyweight Advair after the November news that Hikma and partner Vectura were locked in a dispute with the FDA. An update is expected later this quarter.