Teva's Surprising Choice of Chairman May Be Short-term Fix

Yitzhak Peterburg's appointment to chair big pharma firm follows rejection from overseas candidates.

Teva's headquarters in Jerusalem.
Bloomberg

Last week’s appointment of Yitzhak Peterburg as the new chairman of the board at Teva Pharmaceutical Industries, replacing Phillip Frost, was surprising for a number of reasons.

Teva

After interviews were conducted with dozens of candidates, including former senior executives with a number of major pharmaceutical firms, Teva decided to go with current board member Peterburg – a former director general of Clalit Health Services and ex-CEO of Cellcom, the cellular service provider. Peterburg also did a short stint as head of the Israeli drug company’s global branding unit.

Teva attempted to recruit a candidate from abroad, but all of those approached declined the Teva chairmanship – including Dr. Sol Barer, who, for personal reasons, consented only to be appointed as a member of the board. Barer is the former chairman and CEO of the U.S.-based biotech company Celgene.

It is reasonable to assume that Peterburg will be easier for Teva CEO Erez Vigodman to work with than outgoing, opinionated chairman Frost or a foreign, former drug company exec would have been.

The fact that Peterburg is up for reelection to the board in 2016 may leave open the prospect that, if he shows his mettle by that point, Vigodman may replace Peterburg as chairman and acquire expanded responsibilities as chairman-CEO.

Another possibility is that Barer would at that point replace Peterburg. Or perhaps the chairmanship could go to Teva board member Jean-Michel Halfon, the former director of emerging markets at Pfizer.