Teva lures Levin to repeat BMS dealmaking

The changing of the guard at Teva Pharmaceutical Industries ($TEVA) couldn't more clearly signal a change in the generics giant's worldview. Under the current CEO, Shlomo Yanai, Teva more than doubled its sales by expanding globally and diversifying its product line. It also set some ambitious goals for continued growth, aiming for revenue numbers to rival Big Pharma. Now, it's turning to its first non-Israeli leader to make those sales happen.

Teva sank almost $7 billion into its multibillion-dollar goals with the acquisition of branded drugmaker Cephalon. In wooing Bristol-Myers Squibb's ($BMY) Jeremy Levin to take over as CEO, the company has set the stage for more deals. Levin, after all, led the charge on BMS' "string of pearls" strategy. The 17 acquisitions BMS made with Levin, one analyst tells Bloomberg, have made him the "number one person in business development" in the industry. "A lot of companies say they want to acquire and license stuff, but I can't think of a company that's done it as successfully as Bristol," ISI Group analyst Mark Schoenebaum told the news service.

Yanai is stepping aside with his 60th birthday in May, saying "it's the right time for me to embark on new endeavors." Levin will take the reins at that point. Unless Teva's shares mount upward significantly, Yanai won't be leaving at a high point; the company's stock has suffered over the last couple of years. In a way, Yanai has been a victim of his own success—and his own ambitions. Aggressive sales forecasts for 2011 didn't prove accurate as growth slumped in the second half of the year and quality issues at a Jerusalem plant interfered with output.

So, the question on everyone's mind is whether Levin can deliver at Teva the way he did at BMS. As Levin was tasked with making up the loss-of-exclusivity sales gap on BMS' Plavix, he'll be aiming to save Teva from a major hit to sales when the multiple sclerosis treatment Copaxone faces generic rivals. As Ori Hershkovitz, partner at Sphera Funds Management, told Bloomberg, "If Jeremy can do one or two good product selections as he has done in the past for Bristol-Myers, that will be very, very good for Teva."

- read the Haaretz story
- get the Bloomberg article
- see analyst reaction from Haaretz

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