As cri­sis deep­ens, Teva's board sees off CEO Erez Vigod­man and an ac­tivist urges a split in­to two com­pa­nies


The re­volv­ing door out­side Te­va’s ex­ec­u­tive suite is spin­ning again. A lit­tle more than three years af­ter Je­re­my Levin was un­cer­e­mo­ni­ous­ly pushed out of the CEO’s job, his suc­ces­sor is fol­low­ing in the same path, just days af­ter back-to-back set­backs on sales pro­jec­tions and the loss of some key patents. And an ac­tivist in­vestor says the lat­est signs of tur­moil at Te­va should spur a move to split the com­pa­ny be­tween its gener­ic op­er­a­tions and the brand­ed group backed by a pipeline.

Te­va says that Erez Vigod­man is gone by “mu­tu­al agree­ment.” Chair­man Yitzhak Pe­ter­burg is step­ping up to the helm while the hunt be­gins for a new CEO. And Cel­gene co-founder and biotech en­tre­pre­neur Sol Bar­er is tak­ing the chair­man’s job.

The Is­raeli com­pa­ny has been a per­pet­u­al dis­ap­point­ment over the past year to many an­a­lysts. Vigod­man has been crit­i­cized for pay­ing too much in its gener­ics deal with Al­ler­gan. And his rep for tak­ing the wrong step was re­in­forced at the be­gin­ning of this year when Te­va was forced to slash a bil­lion dol­lars off its 2017 sales fore­cast af­ter its rev­enue from new prod­ucts fell dras­ti­cal­ly short of ear­li­er pro­jec­tions for 2016.

The tur­moil has caused Wells Far­go’s David Maris to ques­tion whether Te­va — the world’s largest gener­ics play­er which al­so has a pipeline of ex­per­i­men­tal drugs — had the right team in place. For ac­tivist in­vestor Ben­ny Lan­da, though, the re­al ques­tion is whether the com­pa­ny needs to split its op­er­a­tions.

“I hope that this vi­sion in­cludes split­ting Te­va in­to two com­pa­nies,” Lan­da told Globes. “When you look at the suc­cess­ful com­pa­nies in the world, the key word is fo­cus. Com­pa­nies split so that each com­pa­ny af­ter the split will be able to fo­cus on its sec­tor. Te­va should be split in­to a gener­ics com­pa­ny and a sep­a­rate brand­ed drug com­pa­ny. Te­va has re­cent­ly fo­cused on gener­ics to the ex­tent that it lost di­rec­tion, and didn’t re­al­ize that it should in­vest in the in­no­v­a­tive field for the sake of its fu­ture. These are ac­tu­al­ly two sec­tors with al­most no con­nec­tion be­tween them.”

“On my end, in­vestor feed­back track­ing 60-40 in fa­vor of split in­to brand­ed vs gener­ics,” notes Ever­core ISI’s Umer Raf­fat in re­sponse. “ A split wouldn’t cre­ate val­ue out of thin air … but in­vestors point out that it would al­low a brand­ed and gener­ics biz to run sep­a­rate­ly with a laser fo­cus … with nei­ther side tap­ping in­to the re­sources of the oth­er side and with full cost cut ex­e­cu­tion on gener­ics side. Hav­ing said that, in­vestors ac­knowl­edge a split isn’t im­mi­nent, and may like­ly take some time to ex­e­cute (as­sum­ing it hap­pens).”

I asked Levin what he thought about Vigod­man’s ex­it. His re­ply:

The com­pa­ny has a lot of work to do and the Board will have to make de­ci­sions to re­build man­age­ment, so­lid­i­fy the strate­gic di­rec­tion and pro­vide con­fi­dence to the share­hold­er base.  Te­va is an im­por­tant com­pa­ny and it has a ma­jor role to play in de­liv­er­ing med­i­cines to pa­tients and so­ci­eties around the world.

Vigod­man’s sud­den fall al­so came on the heels of some un­usu­al­ly blunt crit­i­cism from Kite Phar­ma CEO Arie Bellde­grun, who just re­cent­ly re­signed his seat on the board at Te­va. Bellde­grun ze­roed in on Te­va’s chron­ic prob­lems with ad­vanc­ing new drugs through the pipeline.

“Every drug com­pa­ny has to change con­stant­ly,” Bellde­grun told Globes, just days af­ter Te­va lost a court fight to pro­tect the patents on its flag­ship prod­uct, Co­pax­one. “Te­va was very com­fort­able with Co­pax­one, but it should have al­ready pre­pared 8-10 years ago for its sub­se­quent life, and no such prop­er prepa­ra­tions were made. You can’t ac­cuse the com­pa­ny; it grew so fast. Now it is in­vest­ing in its fu­ture de­vel­op­ment, but a tem­po­rary hole has been left, and must be sur­vived. Te­va’s fu­ture will come from Prof. Michael Hay­den’s de­part­ment (the in­no­v­a­tive de­part­ment, G.W.). Every­one is sor­ry that (for­mer gener­ics di­vi­sion head) Sig­gi (Sig­ur­dur) Olaf­s­son left, but Sig­gi wasn’t work­ing on Te­va’s fu­ture.”

“The Com­pa­ny is fo­cus­ing on ex­e­cut­ing its strate­gic pri­or­i­ties to trans­form Te­va, with im­me­di­ate fo­cus on re­al­iz­ing the cost syn­er­gies and strate­gic ben­e­fits of the Ac­tavis Gener­ics ac­qui­si­tion,” said Pe­ter­burg in a state­ment. “I look for­ward to work­ing with the en­tire Te­va team to con­duct a thor­ough re­view of the busi­ness to find ad­di­tion­al op­por­tu­ni­ties to en­hance val­ue for share­hold­ers. Te­va has a deep bench of tal­ent­ed lead­ers and to­day’s an­nounce­ment has no im­pact on our abil­i­ty to ex­e­cute go­ing for­ward. With the strength of our gener­ics pipeline, unique R&D ca­pa­bil­i­ties and un­par­al­leled foot­print, cou­pled with our ex­ist­ing as­sets and grow­ing pipeline in spe­cial­ty med­i­cines, I be­lieve in Te­va and the Com­pa­ny’s long-term growth prospects.”

https://twit­ter.com/Arm­strong­Drew/sta­tus/828737610235379713

M&A: a crit­i­cal dri­ver for sus­tain­able top-line growth in health­care

2021 saw a record $600B in healthcare M&A activity. In 2022, there is an anticipated slowdown in activity, however, M&A prospects remain strong in the medium to long-term. What are future growth drivers for the healthcare sector? Where might we see innovations that drive M&A? RBC’s Andrew Callaway, Global Head, Healthcare Investment Banking discusses with Vito Sperduto, Global Co-Head, M&A.

15 LGBTQ lead­ers in bio­phar­ma; Paul Stof­fels’ Gala­pa­gos re­vamp; As­traZeneca catch­es up in AT­TR; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

A return to in-person conferences also marks a return to on-the-ground reporting. My colleagues Beth Synder Bulik and Nicole DeFeudis were on-site at Cannes Lions, bringing live coverage of pharma’s presence at the ad festival — accompanied by photos from Clara Bui, our virtual producer, that bring you right to the scene. You can find a recap (and links to all the stories) below.

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Abortion-rights protesters regroup and protest following Supreme Court's decision to overturn Roe v. Wade. (AP Photo/Gemunu Amarasinghe)

Fol­low­ing SCO­TUS de­ci­sion to over­turn abor­tion pro­tec­tions, AG Gar­land says states can't ban the abor­tion pill

Following the Supreme Court’s historic decision on Friday to overturn Americans’ constitutional right to an abortion after almost 50 years, Attorney General Merrick Garland sought to somewhat reassure women that states will not be able to ban the prescription drug sometimes used for abortions.

Following the decision, the New England Journal of Medicine also published an editorial strongly condemning the reversal, saying it “serves American families poorly, putting their health, safety, finances, and futures at risk.”

AstraZeneca's new Evusheld direct to consumer campaign aims to reach more immunocompromised patients.

As­traZeneca de­buts first con­sumer cam­paign for its Covid-19 pro­phy­lac­tic Evusheld — and a first for EUA drugs

AstraZeneca’s first consumer ad for Evusheld is also a first for drugs that have been granted emergency use authorizations during the pandemic.

The first DTC ad for a medicine under emergency approval, the Evusheld campaign launching this week aims to raise awareness among immunocompromised patients — and spur more use.

Evusheld nabbed emergency authorization in December, however, despite millions of immunocompromised people looking for a solution and now more widespread availability of the drug.

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Joe Papa (Ryan Remiorz/The Canadian Press via AP, File)

Joe Pa­pa re­signs as chair of Bausch Health as bil­lion­aire John Paul­son takes over

Joe Papa, chair of Bausch Health, officially resigned on Thursday and the board appointed billionaire hedge fund manager John Paulson as the new chair, effective immediately.

The specialty pharma company sought to make clear that Papa’s abrupt departure “was not due to any dispute or disagreement with the Company, its management or the Board on any matter relating to the Company’s operations, policies or practices.”

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GSK says its drug for chron­ic hep B could ‘lead to a func­tion­al cure’ — but will it be alone or in com­bi­na­tion?

GSK, newly branded and soon-to-be demerged, shared interim results from its Phase II trial on its chronic hepatitis B treatment, one that it says has the “potential to lead to a functional cure.”

At a presentation at the EASL International Liver Congress, GSK shared that in around 450 patients who received its hep B drug bepirovirsen for 24 weeks, just under 30% had hepatitis B surface antigen and viral DNA levels that were too low to detect.

De­spite a slow start to the year for deals, PwC pre­dicts a flur­ry of ac­tiv­i­ty com­ing up

Despite whispers of a busy year for M&A, deal activity in the pharma space is actually down 30% on a semi-annualized basis, according to PwC’s latest report on deal activity. But don’t rule out larger deals in the second half of the year, the consultants said.

PwC pharmaceutical and life sciences consulting solutions leader Glenn Hunzinger expects to see Big Pharma companies picking up earlier stage companies to try and fill pipeline gaps ahead of a slew of big patent cliffs. Though a bear market continues to maul the biotech sector, Hunzinger said recent deals indicate that pharma companies are still paying above current trading prices.

Joe Wiley, Amryt Pharma CEO

Am­ryt Phar­ma sub­mits a for­mal dis­pute res­o­lu­tion to the FDA over re­ject­ed skin dis­ease drug

The story of Amryt Pharma’s candidate for the genetic skin condition epidermolysis bullosa, or EB, will soon enter another chapter.

After the Irish drugmaker’s candidate, dubbed Oleogel-S10 and marketed as Filsuvez, was handed a CRL earlier this year, the company announced in a press release that it plans to submit a formal dispute resolution request for the company’s NDA for Oleogel-S10.

Sen. Thom Tillis (R-NC) (J. Scott Applewhite/AP Images)

Phar­ma-friend­ly sen­a­tor calls on FDA for a third time to show patent pro­tec­tions should­n't be blamed for high drug prices

North Carolina Republican Sen. Thom Tillis made a name for himself in the 2020 election cycle as the darling of the pharma industry, accepting hundreds of thousands in campaign contributions, even from the likes of Pfizer CEO Albert Bourla.

Those contributions have led Tillis to attempt to re-write patent laws in pharma’s favor, a move which failed to gain steam in 2019, and request for a third time since January that the FDA should help stop “the false narrative that patent protections are to blame for high drug prices.”