Teva Says Jeremy Levin Named Next CEO

By Naomi Kresge - Jan 2, 2012 8:28 PM GMT+0700

Teva Pharmaceutical Industries Ltd. (TEVA) named Jeremy Levin of Bristol-Myers Squibb Co. (BMY) to replace Shlomo Yanai as chief executive officer as the world’s biggest generic- drug maker seeks to diversify its portfolio of innovative medicines.

Levin, 58, a Cambridge University-educated physician who worked at Bristol-Myers as senior vice president for strategy, will take over as president and CEO in May, the Petach Tikva, Israel-based company said in a statement. Yanai, 59, will retire from the company, it said.

Yanai is stepping down after Teva’s shares (TEVA) plunged the most since 2006 last year amid mounting competition for its No. 1 drug, a branded multiple sclerosis medicine called Copaxone. Yanai, a former Israeli army general with no previous pharmaceutical experience, spent $6.5 billion last year to buy U.S. biotech Cephalon Inc., then told investors in December that Teva may not able to meet its long-term target of $31 billion in sales by 2015.

“Investors will like the idea that Shlomo’s replacement is from the industry and someone with knowledge and experience, especially from the innovative side of the business,” Natali Gotlieb, a Tel Aviv-based analyst for Israel Brokerage & Investments Ltd., said by phone today. Teva needs to integrate Cephalon’s portfolio of new medicines, said Gotlieb, who has a “buy” rating on the Israeli company’s shares.

Shares Rise

Teva rose 3.3 percent to 160.60 shekels at 1:30 p.m. in Tel Aviv, the biggest intraday increase in two months. The company’s more actively traded American depositary receipts lost 21 percent in 2011 including reinvested dividends, compared with (TEVA) an 11 percent return for the Bloomberg EMEA Pharmaceuticals Index. The U.S. stock market is closed today for the New Year’s holiday.

Teva started looking for Yanai’s replacement during the course of last year, Chairman Phillip Frost said at a news conference in Tel Aviv today. He declined to be more specific.

Yanai wasn’t asked to retire, said Denise Bradley, a Teva spokeswoman. “Shlomo came to the board with his decision, and the board accepted it, appreciating his considerable contributions to Teva but recognizing his desire to move on,” Bradley said by e-mail.

“The time has come to start a new path,” Yanai said at the news conference. “I intend to use all my knowledge, ability and experience for the good of Israel’s industry, economy and society.”

Conference Call

Teva plans a conference call for analysts at 8:30 a.m. New York time tomorrow.

Teva announced Dec. 21 it would buy back as much as $3 billion of its shares to return money to investors. The $31 billion sales goal for 2015 is “aspirational,” Yanai said then.

Analysts suggested the share buyback might herald a pullback from a streak of acquisitions that in recent years included Germany’s Ratiopharm GmbH and Barr Pharmaceuticals Inc. of the U.S.

Sales of Copaxone, Teva’s biggest drug, probably will peak this year at $3.8 billion, though a generic competitor will take a while to reach the market, Teva said. The injected MS drug accounted for 24 percent of Teva’s $4.34 billion of revenue in the third quarter and is facing competition from Novartis AG’s Gilenya, the first oral drug for MS.

Cambridge, Oxford

Before joining Bristol-Myers Squibb, the South African-born Levin was global head of business development and strategic alliances at Novartis from 2003 to 2007. He has worked as a practicing physician and has a medical degree from Cambridge and a doctorate from Oxford University in molecular biology, according to the statement. Levin has is a citizen of both the U.S. and the U.K.

This is the first time the CEO of Teva, Israel’s biggest company, will not be an Israeli.

“There are very few figures in Israel with the required experience to run a company the size of Teva,” Jonathan Kreizman, a Tel Aviv-based analyst at Clal Finance Brokerage Ltd., said by phone today. “Bringing a veteran from the pharma industry is a smart move.”

To contact the reporter on this story: Naomi Kresge in Berlin at nkresge@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net