Teva: Vigodman Steps Down, Peterburg Hired as Interim CEO
Teva Pharmaceutical Industries Ltd.TEVA recently announced that its present chief executive officer (CEO), Erez Vigodman, is stepping down. The company has named Dr. Yitzhak Peterburg as the interim president and CEO, effective immediately.
Peterburg has served as the chairman of Teva's board of directors since Jan 2015. However, he will now let go of this position to serve as the interim CEO, in accordance with Israeli law. Dr. Sol J. Barer, another board member will replace Peterburg. Meanwhile, Teva has begun the search for a new CEO.
Following the announcement, shares of the Israeli generic pharmaceuticals company declined almost 1% in after-hours trading.
Vigodman's departure comes amid a challenging time for Teva. The company's shares have lost 5.3% so far this year, much worse than the increase of 2.0% witnessed by the Zacks classified Generic Drugs industry.
Last week, Teva suffered a major setback with the U.S. District Court for the District of Delaware invalidating all asserted claims of the '250, '413, '776 and '302 patents for the company's blockbuster multiple sclerosis (MS) treatment, Copaxone 40 mg. Teva, which saw its shares slip on the ruling, intends to appeal to the decision. Copaxone is the key branded drug in the company's portfolio. The company is facing patent challenges for the 40 mg thrice-weekly formulation of Copaxone. Companies like Mylan N.V. MYL and Momenta Pharmaceuticals MNTA are looking to get approval for their generic versions of the 40-mg thrice-weekly formulation of Copaxone. Meanwhile, the 20 mg formulation of Copaxone has already started facing generic competition. In Jun 2015, Novartis AG' NVS generic arm, Sandoz launched Glatopa, a once-daily generic version of 20 mg formulation of Copaxone.
Last month, Teva provided a weaker-than-expected sales and earnings guidance for 2017 as Copaxone reels under competitive pressure.
Teva also mentioned that the 40 mg formulation is not expected to face generic competition in the U.S. this year. However, the company also stated that the entry of two generic competitors for Copaxone in the U.S. in Feb 2017 could hurt revenues by $1.0 billion to $1.2 billion and adjusted earnings per share by 65 cents to 80 cents this year.
Note that 2016 was a transition period for Teva with headwinds existing in the form of fewer large generic opportunities, generic competition for Copaxone as well as new competition for branded products, and a higher cost base.
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