In a surprise move, the board of directors of Teva Pharmaceutical Industries decided on Wednesday to appoint Yitzhak Peterburg, the 63-year-old former CEO of the Cellcom cellular service provider, as its next chairman, replacing Phillip Frost. From 1997 to 2002, Peterburg was CEO of Clalit Heath Care Services, the country’s largest health maintenance organization.
- Israel-based Teva needs strategy reset with new CEO
- Taro Pharmaceuticals, once nearly broke, now has $6 billion market cap
- Teva's surprising choice of chairman may be short-term fix
Peterburg will take office on January 1. His election comes after Frost, who is also Teva’s largest non-institutional shareholder, with a 1.5% stake in the Israeli pharmaceutical giant, announced that he would not stand for reelection at the company’s annual shareholders’ meeting and would step down from office at the end of the year.
Peterburg was chosen following a preliminary screening process carried out by the Egon Zehnder executive search and placement firm. The search process also involved consideration of a list of candidates by a special board subcommittee chaired by Teva board member Yossi Nitzani.
The selection of Peterburg was surprising in part because two other candidates, current Teva vice chairman Amir Elstein, who is a member of one of Teva’s founding families, and another board member, Dan Propper, were thought to have a better shot at the chairmanship among the Israeli candidates. There were also expectations that a former senior official from a major pharmaceutical firm might be chosen chairman.
Peterburg served an initial term on the Teva board from 2009 to 2010 and then resigned when he was appointed senior vice president for global branded products at Teva. He only stayed in the post until 2011 and was not seen being there long enough to leave his personal stamp on that aspect of Teva’s business. He rejoined the board of Teva the following year. In the 1990s, he was the director of Soroka Medical Center in Be’er Sheva.
In a related development, the Teva board approved the appointment to the board of Dr. Sol Barer, 67, as part of an effort to expand the number of board members with knowledge and experience in the pharmaceutical field. Barer, a major donor to Rambam Medical Center in Haifa, served in a number of senior administrative positions at Calgene, a biotech company traded on the Nasdaq exchange that currently has a market cap of $90 billion. Barer was acting chairman of the Summit, a New Jersey-based company, from 2010 to 2011 after serving as chairman and CEO of Calgene from 2007 to 2010. Between 1994 and 2006, Barer was VP of operations at the company. Earlier, Barer founded the biotechnology group at the global technology company Celanese. The group was ultimately spun off to create Calgene.
It is thought that Barer’s appointment to the Teva board will help the company make acquisitions of technologies and products and firms in the branded pharmaceutical field. Teva’s major brand drug is Copaxone, which is used for the treatment of multiple sclerosis. Expansion of its stable of original drugs would be expected to ease Teva’s dependence on Copaxone. Teva is the world’s largest seller of generic drugs.
Barer’s appointment follows that of Jean Michel Halfon, a former senior executive at Pfizer pharmaceuticals, who was appointed after calls were issued for a substantial overhaul of Teva’s board from the standpoint of corporate governance and corporate culture. Leading the charge in that regard was Benny Landa, the former owner of digital printing firm Indigo. Landa did not conceal his opposition to Elstein’s appointment as chairman of Teva and earlier this year led a fight to curtail the size of the Teva board.
Landa had special praise for Barer’s appointment, calling it “fantastic news for Teva” and adding that “it is impossible to exaggerate the importance of Dr. Barer’s appointment.” Teva CEO Erez Vigodman needs a “partner and mentor of the stature of Dr. Barer,” Landa said.