Teva Pharmaceuticals, whose CEO Jeremy Levin abruptly quit in October in a dispute over the company’s retrenchment strategy, has narrowed a field of 150 candidates for CEO to three finalists for the company’s top spot.
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Industry sources says that one of the three is believed to be Erez Vigodman, the CEO of Makhteshim Agan Industries. He is credited with turning around Makhteshim, a maker of generic agrochemicals controlled by China National Chemical Corporation, in the years since he took over in 2010. Vigodman returned the company to profitability after closing production lines in Brazil, renewed research and development activity and improved the company’s supply chain and product offerings. In the first nine months of this year, Makhteshim posted a net profit of $156.3 million, compared with a loss in 2010 of $132.2 million.
Many of the challenges that Vigodman faced at Makhteshim are the same ones that Teva faces today, which include eroding profitability in its core generic drugs business, excess production capacity at its 20 or more plants and surplus manpower.
The Teva search committee, which is working with the global executive search firm Egon Zehnder, is expected to name a replacement for Levin before the company publishes its fourth-quarter financial report on February 6. Eyal Desheh, who had been chief financial officer, has been serving as Teva’s interim CEO, but the company, the world’s biggest maker of generic drugs, is in urgent need of a permanent leader who can move forward with cost-cutting plans and devise a strategy for coping with the imminent loss of market exclusivity for its top-selling product, the multiple sclerosis treatment Copaxone.
Levin’s departure caused Teva’s Tel Aviv Stock Exchange traded shares to drop more than 10.5% when he quit last October. They have since recovered half that loss.
A weighted score based on multiple parameters is being used to select the new CEO. The most important parameters are experience as CEO in implementing turnaround plans and working in an environment of uncertainty and crisis. These criteria suggest that unlike Levin, the new CEO will be chosen more for a proven ability to implement efficiency measures quickly and less for the ability to find long-term engines of growth.