Trou­bled Te­va poach­es Lund­beck CEO Schultz with an of­fer he could­n't refuse, in­clud­ing $20M in cash

A lit­tle more than two years af­ter No­vo Nordisk heir ap­par­ent Kåre Schultz jumped ship for the top job at Lund­beck, he’s mov­ing on to take the helm at a storm-tossed Te­va Phar­ma­ceu­ti­cal. Schultz will al­so re­main in the CEO spot at Lund­beck un­til the Dan­ish bio­phar­ma play­er can find a new CEO of its own.

Kare Schultz

And that’s not all. Co­in­ci­den­tal­ly chief com­mer­cial of­fi­cer Staffan Schüberg is al­so leav­ing Lund­beck and tak­ing over at a pri­vate­ly-held com­pa­ny.

Te­va’s shares shot up more than 12% on the news, with Lund­beck stock tank­ing by the same amount.

Te­va’s re­volv­ing door out­side the ex­ec­u­tive suite has seen a num­ber of com­ings and go­ings in re­cent years. Now the com­pa­ny has been stag­gered by a sud­den drop in gener­ic prices right on the heels of a big deal with Al­ler­gan for their port­fo­lio of knock­offs.

Te­va al­so has a weak drug pipeline that has been blitzed by re­peat­ed set­backs as its flag­ship MS ther­a­py Co­pax­one is ex­pect­ed to lose ground to grow­ing gener­ic com­pe­ti­tion.

As a re­sult, Te­va has be­gun to get se­ri­ous about a long-await­ed re­struc­tur­ing of the com­pa­ny in an at­tempt to sal­vage a steadi­ly de­te­ri­o­rat­ing fi­nan­cial po­si­tion. A num­ber of the world’s top bio­phar­ma ex­ecs have been con­sid­ered for the job, in­clud­ing As­traZeneca CEO Pas­cal So­ri­ot and Jack­ie Fouse, who left a top job at Cel­gene and is now run­ning her own biotech com­pa­ny.

They re­port­ed­ly turned down the of­fers.

So the re­cruit­ment team, led by Chair­man Sol Bar­er, turned to Schultz, who has had a mixed record dur­ing his brief run at Lund­beck field­ing new drugs. No­vo Nordisk, mean­while, re­mains one of the most ad­mired com­peti­tors in the in­dus­try.

For CEOs in this cat­e­go­ry, the bulk of their in­come comes from stock awards. Schultz is start­ing with a base pay of $2 mil­lion, up to $4 mil­lion in bonus­es for hit­ting his goals, a $5 mil­lion chunk of stock as a sign-on bonus, an­nu­al eq­ui­ty in­cen­tives of $6 mil­lion, a $20 mil­lion sign­ing bonus and ad­di­tion­al eq­ui­ty awards, plus mon­ey for mov­ing to Is­rael. The ini­tial pack­age is worth around $44 mil­lion-plus, ac­cord­ing to the SEC fil­ing.

Schultz is mak­ing his move at a key point in bio­phar­ma’s his­to­ry. There’s been a wave of top-lev­el changes in the in­dus­try, with new CEOs at GSK, Eli Lil­ly, No­var­tis, Sanofi, Bio­gen, Alex­ion and more. And every new CEO brings their own new R&D and com­mer­cial strat­e­gy in­to play.

For Schultz, Te­va looks like the op­por­tu­ni­ty of a life­time.

“The out­look (at Lund­beck) is strong with high prof­itabil­i­ty and sol­id cash flow gen­er­a­tion many years ahead and I could eas­i­ly see my­self work­ing at Lund­beck for many years. I just got an of­fer that I couldn’t refuse, be­ing CEO at one of the biggest phar­ma­ceu­ti­cal com­pa­nies in the world,” says Schultz in a state­ment.

Im­age cred­it: Shut­ter­stock

As Nas­daq en­rolls the fi­nal batch of 2019 IPOs, how have the num­bers com­pared to past years?

IGM Biosciences’ upsized IPO haul, coming after SpringWorks’ sizable public debut, has revved up some momentum for the last rush of biotech IPOs in 2019.

With 39 new listings on the books and roughly two more months to go before winding down, Nasdaq’s head of healthcare listings Jordan Saxe sees the exchange marking 50 to 60 biopharma IPOs for the year.

“December 15 is usually the last possible day that companies will price,” he said, as companies get ready for business talks at the annual JP Morgan Healthcare Conference in January.

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The need to limit drug prices is a rare point of agreement between President Trump and Democrats, although the president has yet to comment on the proposal and will likely face pressure to back a more conservative option or no bill at all. Republican Senator Chuck Grassley is reportedly lobbying his fellow party members on a more modest proposal he negotiated with Democratic Senator Ron Wyden in July.

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The Boston based company, led by former Pfizer $PFE chief Kindler, originally contemplated a $70 million to $80 million IPO last year— but eventually postponed that strategy. On Wednesday, the company revived its bid to make a public debut in a filing with the SEC — although no pricing details were disclosed.

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