Following news of impending layoffs and disastrous financial performance, the new CEO of generics giant Teva Pharmaceuticals is booting old executives and bringing up a new team to lead the troubled company’s restructuring efforts.
Kåre Schultz, who took the reins at Teva earlier this month, has made staffing cuts his first big move. The company is expected to soon slash 4,000 jobs at its headquarters and plants in Israel, along with some locations in the US, Calcalist reported last Thursday.
Now, the company’s C-suite is also getting a shakeup. Teva announced this morning that three top executives are retiring at the end of the year, confirming rumors that some head honchos were headed out.
Teva’s high-profile R&D chief Michael Hayden, who joined the company back in 2012, is among those leaving the company. Rob Koremans, president and CEO of Teva’s Global Specialty Medicines, and Dipankar Bhattacharjee, president and CEO of Teva’s Global Generic Medicines Group, are also exiting at year’s end.
Schultz has brought up leaders from Teva’s global business arms to lead in Teva’s reworked executive management team.
“Teva is taking decisive and immediate action to address external pressures and internal inefficiencies,” Schultz said in a statement. “Our new company structure will enable stronger alignment and integration between R&D, operations and the commercial regions, allowing us to become a more agile, lean and profitable company… The new management team will position Teva for turnaround in the short to medium term.”
New executive management team:
Michael (Mike) McClellan is appointed Executive Vice President, Chief Financial Officer and will oversee the Finance Group, Business Development, Investor Relations and Information Technology.Previously, he served as Interim CFOandas SVP & CFO Global Specialty Medicines. Prior to joining Teva, Mike was the U.S. CFO at Sanofi.
Dr. Hafrun Fridriksdottir is appointed Executive Vice President, Global R&D. Previously, she served as President of Global Generics R&D. Prior to joining Teva, Hafrun served as Senior Vice President and President of Global Generics R&D in Allergan plc.
Brendan O’Grady is appointed Executive Vice President, North America Commercial.Brendan has previously served as Chief Commercial Officer, Global Specialty Medicine, as interim head of Teva’s European specialty business and as President and CEO for Teva’s North America generics business and as VP US Market Access and Reimbursement.
Richard Daniell is appointed Executive Vice President, European Commercial, after having served as President and CEO, Teva Generics Europe.
Gianfranco Nazzi is appointed Executive Vice President,Growth Markets Commercial. Gianfranco has previously served as President and CEO of Growth Markets at the Global Generic Medicines group, and prior to that he was he has served as Senior Vice President, Specialty Medicines Europe.
Sven Dethlefs is appointed Executive Vice President, Global Marketing & Portfolio. He previously served as Global Head of Respiratory Medicines and as Chief Operating Officer, Teva Global Operations.
Other than the leadership shakeup, Teva expects to announce details on its turnaround plan in mid-December.
“It remains our absolute priority to stabilize the company’s operating profit and cash flow in order to improve our financial situation, while being focused on short-term revenue and cash generation, and at the same time, ensure we deliver on our commitment to supply high-quality medicines to patients around the world,” Schultz said in a statement.
All this restructuring comes days after Israeli’s parliament shuddered at news that the troubled generics maker would lay off about 25% of the company’s Israeli workforce. Israeli Labor Party member Shelly Yachimovich said she intends to call an emergency hearing of the Israeli parliament’s state control committee on the issue, Calcalist reports.
“The workers are simply human sacrifices of a failed management, stupidity and greed,” she wrote in her weekly email newsletter. “We are sick of the policy of excessive tax benefits for companies such as Teva, which provide zero obligation in return.”
Most of the cuts in Israel are expected to hit Teva’s headquarters in Petach Tikva, where the company employs about 1,500 people. But Teva also has plants scattered around the country that might be affected by the layoffs.
These tough cuts aren’t necessarily unexpected. Teva’s last quarterly numbers brought a few key things into view: poor financial results and weak generics prices at a time when the company’s internal pipeline lacks the number of potential blockbusters needed. Teva just cut its financial forecast, with an early introduction of Copaxone 40 mg generics expected to bite hard. That came after Teva built up debt of close to $35 billion for some badly timed acquisitions that leave the company auctioning off assets.
To add insult to injury, Teva’s closely-watched successor to Copaxone flunked out in the clinic this year, which surprised no one following that multiple sclerosis program.
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