Teva Replaces Generic Drugs Head in Surprise Move, Stock Drops 5.6 Percent

Dipankar Bhattacharjee, who has served as CEO of Teva Generics Europe since April 2013, will replace Siggi Olafsson, who will retire at the end of the first quarter of 2017.

Teva's headquarters in Jerusalem.
Bloomberg

Teva Pharmaceutical Industries, the world’s biggest generic drugmaker, has appointed Dipankar Bhattacharjee as chief executive for its global generic medicines group, replacing Siggi Olafsson.

Bhattacharjee, who has served as CEO of Teva Generics Europe since April 2013, will replace Olafsson, who will retire at the end of the first quarter of 2017. Bhattacharjee will be based in the United States.

The surprising announcement sent the company’s stock dropping 5.6% in trade in New York on Monday.

Olafsson’s departure comes at a crucial time for Teva, and it’s nearly impossible to believe those who say the breakup is a friendly one.

The move comes four months after Teva completed its acquisition of Actavis, Allergan’s generics division, investing $37 billion in the company. Olafsson had been charged with integrating the company into Teva.

In the year since the acquisition was announced, there has been a growing consensus that Teva paid an outrageous sum for Actavis in light of the worsening state of the generics market in the United States, the center of Actavis’ operations.

Teva’s stock price has crashed 45% this year amid mounting uncertainty about how Actavis would be integrated.

Olafsson was CEO of Actavis until 2013, and led it from its beginning as a small Icelandic company to a global generic giant.

As CEO of Teva Generics Europe, Bhattacharjee “has a proven track record of improving revenues and profitability, significantly increasing operating profit margins in the European generics business,” Teva said in a statement on Monday.

Launch delays for some drugs led Israel-based Teva last month to trim forecasts for earnings and revenues this year.

Its share price is down by 44 percent in 2016, despite completing a $40.5 billion purchase of Allergan plc’s Actavis generic drug business in August.

Teva on Monday reaffirmed its full-year 2016 outlook of revenues of $21.6-$21.9 billion and adjusted earnings per share of $5.10-$5.20.

Revenues in the fourth quarter are expected to be $6.2-$6.5 billion and adjusted EPS $1.34-$1.44, Teva said.

Teva expects to provide its 2017 outlook in January.

“As we continue to focus on integrating and realizing the value of the Actavis Generics transaction, which is progressing according to plan, Dipankar and his team will focus on generating organic growth through new launches and replenishing the pipeline,” Teva CEO Erez Vigodman said.

Bhattacharjee joined Teva as general manager of Teva UK in 2009. Prior to joining Teva, he served 15 years at Bausch + Lomb in various senior roles.