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.
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.
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