Troubled pharma giant Teva names new CEO, recoups $4B

Teva Pharmaceuticals gained $4 billion in two days on the heels of an announcement that it has appointed a new CEO, Kare Schultz. The troubled pharmaceutical giant, the world's largest manufacturer of generic drugs, said the nomination represents the "successful completion of a global search." Schultz, formerly CEO of Danish pharmaceutical company H. Lundbeck, is expected to relocate to Israel in the coming months and will be based at the company's headquarters in the central Israeli city of Petach Tikva. Schultz, 56, is a veteran in the pharmaceuticals industry with a career spanning nearly 30 years. He received a $20 million signing bonus. Teva has had a rocky few years with increased competition from cheaper drug manufacturers. In August, stocks plummeted to a two-decade low after Teva announced it would be exiting 45 markets worldwide and slashing as many as 7,000 jobs. The news of Schultz's appointment gave Teva shares a much-needed boost, with stocks soaring 25% in two days, making the company some $4 billion. Teva shares have fallen 62% since the beginning of the year. Teva released a statement saying, "Over the course of his career, Mr. Schultz has developed a unique perspective overseeing generic and specialty drug portfolios while managing complex business operations around the world. "He most recently served as the president and CEO of H. Lundbeck, where he is credited with leading significant restructuring initiatives and launching a robust turnaround strategy focused on driving a sustainable global cost structure and operational model. As a result of his leadership, the company is on track to achieve all-time high revenue and earnings." Dr. Sol Barer, chairman of Teva's Board of Directors, said in a statement that "with extensive global pharmaceutical experience, a strong track record executing corporate turnaround strategies, driving growth and international expansion at low incremental cost and delivering on promises to shareholders, as well as a commitment to a culture of compliance, Kare is the right leader to take Teva to the next level. "Kare has deep insight into the global pharmaceutical industry and a keen knowledge of the generic and specialty drug markets. His proven strategic, financial and operational capabilities, his strong commitment to growth, and his disciplined commitment to excellence makes him a clear professional and cultural fit with our company. "We are pleased to welcome a world-class leader of Kare's stature to Teva and look forward to working closely with him to build the Teva of the future for shareholders, employees and patients around the world." Speaking with Israel Hayom, Barer said that Schultz's primary goal would be to spearhead an overhaul of the company. "I am honored to join Teva, an iconic company that I have long admired during my career," Schultz said in a statement quoted by financial daily Globes. "What drew me to Teva, and what makes Teva different from its peers, is its unique commitment to growing an extensive global reach while continuing to provide new and high-quality treatments for patients and an innovative culture for its employees. "I am proud to be joining a company that helps millions of patients around the world on a daily basis with its broad range of generic and specialty drugs and solutions. I look forward to working closely with the entire team at Teva to build a future of success for the company and its stakeholders." Speaking with the Bloomberg news agency Tuesday, Schultz said he was "the kind of person who likes a challenge and [is] inspired by challenges." As part of dealing with the challenges its current $30 billion debt poses, Teva announced the sale of its ParaGard contraceptive device business to California-based Cooper Cos. for $1.1 billion. The sale will include the Buffalo, New York, facility where Paragard is made. Paragard is a nonhormonal intrauterine device with revenues of some $168 million in the 12 months that ended June 30.